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An American friend of mine, who's a permanent UK resident and currently sorting out their US tax return, has just come across a new term from FATCA - Passive Foreign Investment Company (PFIC). Via this article from some tax advisors (which may therefore not be entirely neutral), they're starting to wonder about their UK pension and this.

Are all UK pensions automatically counted as qualified, and therefore excluded from the need to fill out the PFIC-related form 8621 as part of a tax return? Or if it's only some UK pensions, how would my friend go about working out if their pensions count or not? (I think they've got something like a stakeholder one through their current work, something else from a previous one, and a SIPP...)

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PFIC has nothing to do with FATCA, and was there way way before FATCA.

PFIC is a real thing, and avoiding investing in funds/holding companies to avoid PFIC qualification is a very good advice.

Specifically with pensions you may also be dealing with foreign trusts, which is another can of worms.

Your friend should hire a US-licensed tax adviser who's familiar with the UK economy and terms.

BTW: Your friend should also familiarize themselves with FBAR (Report of Foreign Bank and Financial Accounts)

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  • The cost of a suitable tax advisor is what prompted me to offer to ask here! – Gagravarr Jun 9 '16 at 9:25
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    @Gagravarr you'll get here what you paid for – littleadv Jun 10 '16 at 5:35

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