Common issues US residents with a UK pension(s) face
Americans returning home from the UK as well as British nationals moving permanently to the US with one or more UK pensions are increasingly realizing that they are unable to work with UK financial advisors and pension providers. Reasons cited range from an unwillingness to deal with US residents due to SEC regulations to advisors stating that their professional indemnity insurance will not allow them to advise US residents. Additionally, individuals intending to remain in the US for the long-term will be exposed to further risks, such as currency risk, if a significant portion of their wealth is invested in Sterling while they live a US dollar-based lifestyle.
How Tanager can help: Our recommended solution
There are several ways to approach these issues that vary according to every individual’s circumstances. A Qualified Retirement Overseas Pension Scheme (QROPS) is commonly perceived as the primary solution for non-UK residents wanting to manage their UK pensions while living abroad. However, many of the benefits of a QROPS do not translate to US residents as the IRS does not recognise such a pension transfer.
An alternative to a QROPS is to transfer an existing pension to a personal pension plan. Although the appropriateness of a UK pension transfer into a personal pension will still vary depending on each individuals’ circumstances, these transfers have many benefits, some of which include:
At Tanager, we believe that clients should be able to maintain control over their UK pension account(s). Our solution allows clients to manage their UK pension(s) from the US, even as US residents. Through our solution, our clients retain the ability to rebalance, transact, and manage their account(s) as they contribute to a US-based retirement plan.
Transparency is critical when dealing with clients’ finances. With our solution, our clients have full transparency into their pension account(s) through our reporting platform. They are able to see their UK pension(s) and how they align with other US or UK-based accounts, as well as the fees charged on their assets.
In addition, our solution allows our clients to access their capital in retirement in whatever form suits them best. This increased flexibility allows us to design a tailored drawdown strategy and to adjust to change, based on our clients’ needs.
Consolidating multiple pensions into a single UK personal pension can greatly simplify matters for a US resident. Through consolidation, our clients maintain fewer moving pieces and accounts, and experience reduced FBAR reporting each year. Consolidation can also be very beneficial when managing pension(s) in line with other offshore assets in a single investment strategy.
At Tanager, we believe in aligning our clients’ pension(s) with the rest of their financial plan, regardless of the location or currency of the underlying accounts or assets. Utilizing a UK personal pension, in conjunction with our financial planning services, allows us to tailor a financial plan to every client’s unique needs, goals, and concerns as US taxpayers with foreign assets.
Our pension solution also offers clients ongoing advice with one of our dual qualified financial advisors. All of our advisors are either dual-citizens or expats themselves, facing the same challenges their clients face, and want to help individuals and families achieve their financial goals. Our ongoing advice is included as part of the financial and investment planning services offered by Tanager.
HOW WE HELP
Adding value to US/UK individuals and families with a carefully tailored financial plan to help you understand and reach your life goals
Our intelligently constructed portfolios are designed for US expats and other US taxpayers. We consider asset location, investment structure and underlying costs when constructing US/UK tax efficient portfolios
BIRD’S EYE VIEW
A portfolio review service for US investors living in the UK. A Bird’s Eye View report will review the structure, risk profile, investments and costs in your existing US portfolio
Philanthropy runs deep in our clients. From occasional gifts to regular contributions Tanager can work closely with your legal and tax advisors to help facilitate gifting between the UK and the USA