US/UK taxation of UK Personal Pension Plans (SIPPs and Stakeholder Pensions)

Nun, you are right.  It makes more sense to just ignore the PFIC issue.

I don't know if I am right or wrong. Professionals will almost always take the most conservative route. For the individual tax payer the route might be different.

It seems strange that in the areas where the professionals are not sure they have not sought out an IRS ruling.

A cynical interpretation would say that at present the professionals earn their keep by muddying the waters and using Fear, Uncertainty and Doubt to prey on vulnerable clients; to get such a ruling, professionals would run the risk that the IRS might actually clear up the grey areas and remove the revenue stream that they get at present from filing loads of potentially unnecessary forms. I don't personally think this is true but it's certainly plausible and I'd welcome posts from some of the professionals on this forum about why they have NOT sought a ruling on this issue or others where there is a difference of opinion.

British American Business - which is the US/UK Chamber of Commerce - have asked the IRS dozens of times over the past 10-15 years for a comment. We do have a good body of IRS opinions now - mostly from Grace Fleeman - all of which point towards mandatory reporting and several of which appear more restrictive then the Treasury Technical Explanation of the treaty.

If you search for Grace on an internet search engine such as Google you will find that she writes most of the IRS PLRs on international pension issues; these are of course IRS counsel's interpretation. While a different lawyer may disagree with IRS counsel's view, doing so would be a high sum game for any taxpayer.

British American Business - which is the US/UK Chamber of Commerce - have asked the IRS dozens of times over the past 10-15 years for a comment. We do have a good body of IRS opinions now - mostly from Grace Fleeman - all of which point towards mandatory reporting and several of which appear more restrictive then the Treasury Technical Explanation of the treaty.

If you search for Grace on an internet search engine such as Google you will find that she writes most of the IRS PLRs on international pension issues; these are of course IRS counsel's interpretation. While a different lawyer may disagree with IRS counsel's view, doing so would be a high sum game for any taxpayer.

There still seem to be no definitive answers. If IRS rulings "point towards" reporting that would mean US tax payers with UK pensions would have to file foreign trust and PFIC forms every year. This clearly negates the purpose of the treaty.

Personally I would get advice from the IRS agents at the US Embassy in London and record their names and numbers.