I moved to the US from the UK, can I transfer my UK pension to my 401k or Roth IRA?

[michaelvenia]

I will eventually be moving back to the UK (next 3-5 years) but I hear that the Roth IRA and 401k are good to have. Am I better off transferring my UK pension over to my 401k or IRA, or is there a UK option that would be more beneficial?



Also is there anything my wife (US) and I (UK) need to consider savings wise when we move to the UK? Is there anything we can take advantage of I might be missing?

 

[genebgto]

@michaelvenia If you have not already, try r/expats group

 

[mfinnergab]

@michaelvenia It's best to leave the UK pension where it is, since you will be returning there before retirement.

Start a new tax shelter in the USA for the income you earn there.

Do not transfer money back and forth, until you have a reason to spend it. You can plan this later in retirement. It will be based on minimising your tax each year.

The one thing you should have together when you return to the UK is to keep the USA accounts established. Make sure you use a vendor who won't close your account when you lose the US mailing address. I do all my cash banking with HSBC and highly recommend them for transnational banking. I do my IRA however with Fidelity. If I could start over I would do 100% HSBC.

 

[michaelvenia]

@mfinnergab Ah, I have my 401k and my IRA with fidelity. I forgot to mention that my UK pension only has £1000 in it. Does the same advice still stand?

What's better about HSBC?

 

[antibody]

@michaelvenia Generally no. The only accounts you can move into a 401(k) or IRA are ‘qualified’ plans that satisfy the US Internal Revenue Code in both form and operation. This is not true of most non-US plans (I think Canadian plans may be an exception but can’t be sure).

UK pension plans would be treated as a trust, but the specific nature of the trust (and therefore, its taxation) will depend upon the UK pension plan itself.

If you are looking to take distributions from the UK plan while you’re in the US, I would get some high quality tax advice which is not cheap. If you’re not, leave it alone in the UK. Just report their existence on your US tax returns.

 

[michaelvenia]

@antibody I should have specified there's only about £1000 in my UK pension. But that is good to know. Thanks for the help