Have you stranded your pension in Malta?

by Alexander Beard, on Nov 17, 2015 2:18:02 PM

Due to the historic inability to move a pension from the UK directly to the US, many UK expats, who are now US residents, moved their pensions to Malta. Malta has a favourable tax treaty with the US and allows pension access from that country, so a move to Malta may have made sense in the past.

Now, however, with the advent of FATCA and the knock-on IRS impacts for individuals, moving a pension to Malta may be increasingly risky. As we warned back in 2014, a pension move to Malta now, or one that has already taken place, could expose your pension to FATCA considerations and therefore to potential IRS fines. If the pension had been left in the UK then it would not have invited analysis, due to the double taxation treaty between the UK and the US and the fact that UK pension schemes are exempt from FATCA reporting.

However, this does not help if your pension is already in Malta, or if you have been considering moving it there. What should you do now? How can you proceed, access your pension in the US and not expose yourself to undue taxation, and this is before you consider the extra legwork required when you move your pension to a third country.

The solution will depend very much on individual needs and circumstances, and we would advise everyone in any of the above situations to seek independent financial advice from a cross-border financial expert.

Some of your considerations at this time will rely on answering some key questions about your pension requirements. Do you still wish to save into your pension? When do you wish to withdraw from your pension and in which country and currency?

Depending on the answers to those questions, you may wish to investigate our own solution, AMVEST. AMVEST stores your pension in the UK, but invests through US experts in US$. This allows you to withdraw your pension in your new country and currency, without worrying about FATCA concerns or legislation in other countries.

If you would like formal advice on your financial situation, your move to the US, your pension, FATCA or any other element, please feel free to contact Alexander Beard Group using any of the details on our contact page .