eSignature Licitness for Military Leave Policy in United Kingdom

How to eSign a document: e-signature licitness for Military Leave Policy in United Kingdom

good afternoon this is sean golden with golden golden here to discuss the basics of the tax treatment in the united states of a uk sip a self-invested personal pension board this is something that we see often it's very common for people who reside in the uk to have sips especially if they were self-employed or just wanted some additional retirement padding similar to an ira in the united states now we're only focusing on the uk sip not like the q robs and malta or things like that since the united states and the uk have entered into a tax treaty it can get a little bit confusing regarding the taxation possible reporting of the sip now whether or not it was received whether or not the sip was created from the get-go or whether you have multiple pensions that were kind of combined into one sip can impact how it's treated in the u.s and possibly how it's taxed and when you're dealing with sips in the u.s there's two issues there's the taxation and then there's reporting so why don't we go through the basics even though a sip is kind of treated similar to an ira or 401k it's not the same thing okay from a u.s tax perspective you don't get all the the benefits all the bells and whistles you would get if you were contributing that money into the us version alternative so one thing to keep in mind is what type of assets are underlying the sip for example let's say you had a sip and everything all the assets within it are vanguard etfs well then that's going to impact the reporting and the tax versus if you said everything in your sip are foreign stocks and securities or are they foreign mutual funds etfs and cops so kind of getting an idea of what the underlying assets are within the sip will impact um the taxation rules in general uh if you have foreign mutual funds in the sip then you don't necessarily pay tax as you go because they're foreign mutual funds and then you may have a form 8621 complication and then down the line when you start taking distributions they may be considered excess distribution so that's something to keep in mind as well if you're receiving distributions from it typically it's going to be taxable right because you're receiving distributions but if you have income being generated and accrued within the sip then that's something that you got to discuss with with your specialists to kind of go through what the different assets are what type of income are they generating are the assets within the sip u.s based or foreign based um etc etc reporting for the sip is typical of reporting any type of foreign pension plan right you've got the fbar foreign bank and financial account reporting technically the form is referred to as fincen form 114. fincen refers to the foreign um financial crimes enforcement network excuse me but don't think about the word crime i always mention this because it's always this fear-mongering thing online most of the time nearly all the time f-bar non-compliance is not going to be criminal unless there's other aspects like structuring money laundering tax evasion things of that nature the f bar is typically filed in any year that a taxpayer has more than ten thousand dollars in annual aggregate total in foreign accounts not per account it's an aggregate total fatca form 8938 is another common reporting requirement fact is similar to the fbar but it includes more reporting in that you also have to identify income associated with the different assets identified on the form 8938 that form 89 38 is part of the tax return the f bar is filed separately we have a whole another presentation just going through the basics of f bar we're comparing fbar versus 8938 you may have to include items on both of these forms now with the 8938 it can get even more complicated when you have things like foreign mutual funds because you may also have a form 8621 requirement which is used to report pfix like passive foreign investment companies including foreign mutual funds but typically you don't have to duplicate the reporting but if not all of your assets in the sip are for mutual funds then there can be some it's just duplicative in nature so again something to go through uh with whoever you're working with uh there's also the form 3520 and 3520 hyphen a now that is used to report gifts in foreign trusts but in 2020 the internal and the form 3520 is complicated and and much more complicated like than the f bar and the 89 38 and even the irs recognized the complexity of the form especially in things like tax deferred retirement and non-retirement fund schemes and so they developed revenue procedure 2020-17 which doesn't specifically say you don't have to include sips but it basically says if you have tax-deferred investments in retirement investments in foreign countries you meet the requirements which of course are ambiguous in nature then you can avoid the duplicative nature of having to file 3520 3520a even though you would still do f bar and fatca if you're out of compliance there's various programs you can use to get into compliance if you're willful or just can't certify under penalty of perjury that you're non-willful you would do the um you would do voluntary disclosure bdp otherwise if you're non-woeful many other programs available to you streamline file and compliance procedures domestic and foreign which just based on the residence of the person they both refer to foreign assets or offshore assets you know when the irs uses offshore don't think of it as like some seedy thing some tax exempt country it just means money outside of the united states other than if you're non-woeful there are alternatives to streamline there's something called reasonable cause and something called delinquency although the latter program was modified at the end of november 2020. we have lots of free information available on our main website and our sub websites you can always reach out and schedule a reduced fee initial consultation if you think it's appropriate and it's something that we handle here again my name is sean goldman with golden golding thank you for your time enjoy the rest every day