I have a pension plan in the UK i have not contributed to it in many years, I have not taken any moneys out of it, do i have to report this in this years US tax filing?

[Irene2805]

You do not have to report anything on your tax return until you make a withdrawal from the UK pension plan.

However, if the value of your UK pension plan exceeded $10,000 at any time during the calendar year you are required to file a FinCen 114 - Report of Foreign Bank and Financial Accounts (FBAR) 

FinCen114 is NOT filed with your tax return.  For information, please see this TurboTax Help article:  How do I file an FBAR report (FinCEN 114)?

For additional information on the US tax treatment of UK pensions, please see this article:   UK Pension Plans & US Tax Treatment

[bjblackmore]

I have a similar question. I'm a UK citizen, living in the US as resident alien on an L1 Visa. Back in the UK I have a company pension plan, which is worth more than the $10k threshold, although I won't be drawing the pension for another 25 years, do I still need to declare it? And if so, is the form FinCen 114 or form 8938 (not sure what the difference is).

[MaryK4]

Yes, as a resident alien you will want to file the FBAR.  Depending on the value, you may also have to file the Form 8938.  Note- the FBAR is separate, has the $10K income threshold and has a different due date.  

The FBAR Foreign Pension Plan reporting rules define a foreign pension as an account which must be reported.  Even if the account was opened and earned prior to becoming a U.S. Person and no distributions are being made, it still must be reported on the FBAR.

Certain U.S. taxpayers holding specified foreign financial assets with an aggregate value exceeding $50,000 will report information about those assets on new Form 8938, which must be attached to the taxpayer’s annual income tax return.  

See How do I file an FBAR report (FinCEN 114)? - TurboTax

@bjblackmore

[abeatty44]

On this same topic.  I moved from the UK to USA in 2016, and have not contributed to my UK pension plan since leaving the UK.  I have no income from the pension as it is sitting dormant until I start withdrawing from it which may be another 20 years away. 

I was not aware of the need to report this on my US taxes, and I had not even thought of it - out of sight out of mind. 

Do I need to amend my taxes and specifically form 8938 and FBAR for previous years, or can I just start doing it for this year.  

Thanks in advance.

[AmyC]

The IRS issued a proclamation last year that you should not file an amended return unless you have a change in tax liability. This leads me to believe that you should not amend your tax returns. You should include the 8938 moving forward, if required.

Here is a comparison of the FATCA (Form 8938) and FBAR requirements. The FBAR is not part of the tax return. It is filed separately. File FBAR through the Financial Crimes Enforcement Network.

@abeatty44 

[abeatty44]

Thank you.  That is very helpful.  I have one other question.  When updating the foreign accounts section in turbo tax, it refers to two types of foreign financial assets: 1) Foreign Financial Accounts; and 2) what the IRS calls "Other Foreign Financial Assets."  From the below I think I am correct in assuming that a UK Pension is considered an 'Other Foreign Financial Asset' rather than a 'Foreign Financial Account'?

A Foreign Financial Account includes:
- Any depository, custodial or securities account (bank account, savings account, mutual funds, etc.) maintained by a foreign financial institution
- Any equity or debt interest in a foreign financial institution (other than interested that are regularly traded on an established securities market)
- Any cash value life insurance or annuity contract maintained by an insurance company or other foreign financial institution
- This includes a financial account maintained by a financial institution that is organized under the laws of a U.S. possession (American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, or the U.S. Virgin Islands

Other Foreign Financial Assets include any of the following that are held for investment and not held in an account maintained by a financial institution:
- Stock or securities issued by someone other than a U.S. person (including stock or securities issued by a person organized under the laws of a U.S. possession)
- Any interest in a foreign entity, including foreign pension plans, trusts, estates, corporations, partnerships, options and other derivative instruments, debt instruments, interest rate and other swaps or similar agreements
- Any financial instrument or contract that has an issuer or counterparty that is other than a U.S. person (including a financial contract issued by, or with a counterparty that is, a person organized under the laws of a U.S. possession)

Note: Real estate located in a foreign country is not considered a foreign financial asset.

[DaveF1006]

Yes, that is correct. A pension is considered a Foreign Asset and not a Foreign Financial Account. 

If the real estate is held through a foreign entity, such as a corporation, partnership, trust or estate, then the interest in the entity is a specified foreign financial asset that is reported on Form 8938.  If it is owned individually, then it is not.

[abeatty44]

Thanks, when entering the UK pension as a Foreign Financial Asset in Turbo tax, it asks what is the Type of Entity.

Which of the following would a UK pension fall under:

Partnership

Corporation

Trust

Estate

[DaveF1006]

First of all, check no to the answer that asks is this asset is an interest in a foreign entity. Then a dialogue box opens in the bottom of the screen where you will put your personal information in since this is an individual account.

[abeatty44]

So I just enter my own personal details, and I don't have to enter details of the pension provider anywhere? 

Like so: 

[DaveF1006]

That is correct. You do not need to list the pension provider unless it was stock or interest in a foreign entity. You may want to check with the issuer to see if the pension plan is stock or interest of a foreign entity.

[JHH123]

Hi  Dave

I have the similar question with abetty44. I also have the UK pension provided by ex-employer and operated by scottish widow.

1. I assume the name of the asset will be scottish widow UK pension rathern ex-employer name pension, right?

2. Is because the owner of the pension is me, therefore I should fill in my name and my US address rather than the pension operator and the UK company's address

3. I do not contribute nor withdraw any money from the pension. The money in the pension may change every year itself. Should I fill it in like this? nothing in the date acquired and date diposed and uncheck the asset didnt have income, deduction and credit associated with 2023?

4 in temrs of currency GBP, can I use the 2023 average GBPUSD rate in it and the source can I just copy and paste the link I found the value?

Thanks

J

[abeatty44]

Hi J, 

I am doing the same as you suggested for points 1 - 3.  For point 4 - the FX rate, I found this on the IRS website: 

Currency Determination Date Use the currency exchange rate on the last day of the tax year to figure the maximum value of a specified foreign financial asset or the value of a specified foreign financial asset for the purpose of determining the total value of your specified foreign financial assets to see whether you have met the reporting threshold. Use this rate even if you sold or otherwise disposed of the specified foreign financial asset before the last day of the tax year.

I am going to use the closing GBP/USD rate on 12/29/23, which was 1.2733, according to the WSJ.  Scottish Widows also make it very difficult to find historical values as there is no online statements, so I am planning to use the closing balance at year end also.  There is no income, so I figure that this will not make much difference. 

[JHH123]

gotcha, many thanks. That is super helpfil

J