We have expertise in this area having offered advice to several wealthy clients and we provide unbiased advice on US QROPS and SIPPS. The truth is we cannot get all our knowledge into one article so we thought we would do a quick précis and then will provide links to other blogs and pages of information about US QROPS and SIPPS both on our own website and others.
IRS compliant QROPS for US residents
UK options for US residents
A quick look at the ROPS list on the HMRC website ( HMRC ROPS List ) shows the grand total of two schemes.
A 401k and an IRA retirement plan, commonly used in the US, will not accept payments originating from a UK pension scheme. So, what are other websites that offer US QROPS and SIPPS suggesting?
Many suggest you transfer to a US QROPS that has been US approved, and there are plenty of those adverts on the net. We have written confirmation from both the HMRC and also the IRS, that neither organization approve US QROPS; bear in mind HMRC wrote the QROPS legislation. So, why on earth would the IRS in the US approve QROPS in other countries for which there is no approval process?
For clarity there are no US QROPS and SIPPS “approved for US citizens”, and there are no US approved QROPS in places like Malta.
The Double Taxation Agreement between the UK and the US is long established and the way SIPPS and other UK pensions are treated for tax by a resident in the US is also clear.
We are an Independent Adviser regulated in both the UK and registered with the SEC, which is surely the default position that an expat would want? As such we have access to the full US QROPS and SIPPS market to get the best deal for the client.
To be clear, we are very different from many advisers based outside the UK and the US who may or may not have any necessary UK regulated licences, and have a limited range of SIPP providers and custodians available.
In fact, in our experience nearly all of them only utilise Royal London 360 bond providers as custodians; we can also utilise Royal London 360 but we would do so under the basis of rebating all of the commission to you, the client, by re-investing it into the pension investment. Of course, we also have other alternatives which you may consider to match or better these terms.
This blog does not touch on the taxation issues that a resident in the US needs to consider as there could be unpleasant tax consequences if the adviser is not up to the job. QROPS spells danger but then there are also issue of Lifetime Allowance, as well as the actual residency of those being advised; you may or may not be currently living in the US and plan to live there, or alternatively you may be currently living in the US but plan to retire elsewhere. These are important considerations for advice on US QROPS and SIPPS.
Tailormade is the trading name of Aisa Direct Ltd a fee based IFA that is regulated in the UK by the FCA and has MiFiD and IMD permissions for the EU and holds an SEC licence in the USA to provide investment advice to US nationals and US residents. Tailormade specialises in pensions and investments for expatriates. Should you wish to know more then please email them or visit their website.