@Takumi571 , if you were working here in the USA and had exactly the same situation i.e. earnings of "X" taxed by the Feds, you (Y )and your employer (Z) contributed to retirement fund ( like a 403.a / b ) then your AGI would only include X or X-Y , depending on the kind of retirement fund and the amount of contribution etc. The employer contribution and the growth on Y+Z is not taxed till you start receiving distribution from the fund.
This exactly how a foreign pension fund would work --- note though that depending on whether IRS considers this fund a qualified retirement fund, can affect the reporting requirement. US and UK tax treaty also may impact this to a great extent. Therefore suggest you provide more info as to the retirement fund that you are participating in --- does the employer administer it or the govt. , do all employees are allowed to participate, is the employer contribution based on a rule ( percentage of your salary e.g. you are a max of 10% of your gross and the employer contributes a max of 5% etc. ), is it available to highly paid employees etc. etc.
If the plan does not meet to be a qualified plan, then you report X as your foreign earned income , exclude Z ( because it would not qualify for constructive receipt ). Then when you start receiving pension, your basis in the pension would be Y and the Z + growth of (Y+Z) would be taxable over the life of the pension
Does this help ?
