Are You Thinking of Moving To The USA?
The world’s major power, the United States has been a destination for people looking for the American dream since even before the nation was formed from colonies. The modern world’s first successful democratic republic, the United States’ thriving, free economy is an excellent place to seek new opportunities. The majority of the country takes up about half of the North American continent, stretching from the east coast to the west coast. The United States has the largest national economy in the world based on Gross Domestic Product. Due to its vast area, the nation has a wide variety of natural resources. The nation is a world leader in technology, culture and political influence.
The United States has a wide variety of climates due to its diverse land mass. Southern parts of the country are warm most of the year while the northern areas are temperate, comfortable during the summer and cold during the winter. Tropical, desert, plains and mountainous regions can be found within its borders.
The United States has what would be described as a mixed economy, that represents a business and industrial climate as diverse as the country’s geographical makeup. Receiving more imports than any other country in the world, the United States also ranks second in total exports. Its wide variety of industries include automobile manufacturing, the development of consumer electronics, entertainment and media, education and computer software. Innovations such as mechanical flight and the Internet were born in the United States. The culture of the United States is twofold. Due to the influence of mass communications there is a homogenous culture shared throughout the country, but each region still has a unique flavor based on the cultures that came and settled in each region during or since colonization. The United States is also an influence on the cultures of the rest of its world by way of its popular films, television and music exports.
For expats now resident in the US or US nationals that have built up UK pension benefits they will have benefited over the years from UK tax relief on their own or company sponsored pension savings.
UK registered pension schemes are however not recognised by the IRS as qualifying plans. This means that UK tax relieved Pension contributions and investment growth are potentially liable to US Federal Income Tax depending upon availability of foreign tax credits.
QROPS USA could save you tax.
The question for US citizens or expat US tax residents is to what extent are they liable for US or UK Income Tax when taking pension benefits and to what extent are income and gains subject to US Federal Income Tax when the member is not resident in the US?
A transfer of your UK pension to a Maltese QROPS could provide many benefits. This structure qualifies by virtue of Article 18 of the US/Malta tax treaty as a US qualifying pension fund. This means that unlike a UK pension scheme, it is not subject to US tax on US source investment income or income and gains accrued by the plan. The plan is also not subject to tax in Malta as it relies upon the double taxation agreement between the US and Malta.
Details of QROPS USA
Benefits of a US compliant QROPS:
- Offsetting foreign tax credits against the taxable income arising on the transfer to the plan
- Protecting investment growth occurring within the QROPS from US Federal Income Tax
- Ability to draw up to 30% of the fund as an initial lump sum from age 50 tax free
- Possibility of drawing additional lump sums, as a result of the double tax treaty, which may not be liable for US federal Income Tax
- Exemption from taxation on investment growth on distributions, income and gains within the QROPS
- Provision of lump sum death benefits to beneficiaries without a charge to US Federal Income Tax
Who is eligible for a US compliant QROPS?
- A UK national moving to the US
- A US national who has worked in the UK and is moving back to the US
- A US national living outside the US
- A US national who has worked in the UK and is now resident outside the US and the UK
- A Green Card holder who is resident outside the US and UK
As QROPS experts QROPS-advice.net can provide you with all the help and guidance you may need. Contact us today to see how we can help with your QROPS USA enquiry.