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Holistic Financial planning for UK Expats in the USA

Holistic Financial planning for UK Expats in the USA

Looking for Holistic Financial planning for UK Expats in the USA?

Are you a UK expat living in the USA permanently? Do you still have a pension from a previous employer in the UK? It is important to know all the options that are available to UK expats living in the US.

QROPS and International SIPP are the 2 options UK expats living in the US can transfer their existing pensions. We will delve deeper into the subject in the next chapter.

QROPS or International SIPP

The overseas transfer charge (OTC) was introduced on 9th March 2017. This new rule means non-EEA residents would have a charge of 25% levied on the transfer value of existing UK pensions.

The QROPS has great tax benefits but this new charge makes it not a viable option for most UK expats living in the US.

On the other hand, the International SIPP is a great option for UK expats living in America. It is US compliant and has lower cost than a QROPS.

Benefits of the USA SIPP

  • Low cost – up to 3/4 times cheaper than a QROPS
  • Avoid the -25% Overseas Transfer Charge (OTC)
  • Multi-currency options – GBP, EU & USD – this helps mitigate currency risk while living in the US.
  • Wide range of investments available – ETF, Mutual Funds
  • Ability to apply for a Nil Tax (NT) code and have the income paid out gross of UK taxation – you would just declare the income/drawdown taken in the USA
  • US tax compliant

What about your investments in the US?

In order to provide a holistic financial plan for UK expats you will need to find a cross-border financial advisor licensed in both countries and with the capabilities to serve you on both sides of the Atlantic.

At Harrison Brook we are able to do just that. As a financial advisor in the USA for over 6 years with Wells Fargo Advisors, I was able to acquire the necessary skills to advise American clients with their investments. Since I also hold the Level 4 Investment Advice Diploma from the CISI in the UK, I am able to provide you with complete and holistic financial advice.

We are able to use US custodians for retirement assets (IRA or Roth IRA) and keep the assets in the US. It is important to keep the tax deferral and understand the IRS rules regarding these plans. Finding an advisor that understands your situation and needs is a priority for UK expats.

Thinking about moving back to the UK?

If you are not sure how long you will stay in the US but want a portable solution, you will need to make sure your advisor is able to service you on both side of the Atlantic.

At Harrison Brook we are able to serve you as a UK expat in the US and a US expat in the UK or anywhere else in the world.

With our world being more globalized it is common to see UK expats becoming US expats with UK and US assets while living in another country in Europe or Asia. That means that your situation became even more challenging.

Most American investment firms won’t allow a US-connected client to have a foreign address. In a previous article I talked in more details about this issue. Being able to keep the same advisor with the same holistic financial plan is key to having a great retirement plan. We are able to service your US investments wherever your 3rd country is.

Conclusion

To conclude, we would recommend UK expats living in the US find the right cross-border financial advisor that will be able to support them in their journey overseas. Finding a financial advisor licensed in both countries is a challenge. I believe a financial plan should be consistent and should be created with the eventuality that moves happen and should not define the level of service your receive.

At Harrison Brook, we strive to provide the best cross-border financial advice for UK and US expats no matter where they are located now and in the future.  Please don’t hesitate to get in touch and we will be happy to assist you.

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