Hi, we’ve got a situation I wonder if anyone would have any advice on.
I am a USC, he is a UKC. In 2009 we were living in Romania and it looked as if we would stay, so took out a pension plan with ING. But now instead we’re headed back to the UK to settle (I have my ILE visa in hand).
In our naivete, we had no idea what a minefield a foreign pension might be, either for UK or US taxes, and now I’m worried this might blow up in our faces – or that we stand to lose quite a bit. I remember the agent saying it would take about seven years to break even. The plans do have an investment component, but without wading through all the papers, I’m not sure what proportion.
When we return to the UK we’ll no doubt take out a British pension, at least for him, if not for me, not to mention the state one. We were minded to (if we could) keep paying into these Romanian ones for another few years, break even and be shot of it. (Besides, it will pay in local currency.)
There are really two sets of questions here, one for US law and taxes and one for UK: Once we are in the UK, is it even legal to keep and contribute to these? Or is it legal, but a nightmare to sort out and report?
If anybody has any knowledge/experience of these things, either from the UK or US side, I’d really appreciate it if you could share your wisdom. Do we: a) dump these things asap?; b) hang on for the seven or so years?; c) Call a tax person (one for each country)?; d) two or more of the above? We probably don’t owe anything but obviously don’t want to be smacked with fines or penalties.
Our deadline for renewal is looming very soon, before our date to return to the UK. I’ve emailed a few people who might know about these things, and have asked for estimates from the agent on cashing out the policies, but so far no answers. I need to know the best thing for us to do before it’s too late to renew.
Thanks for staying with me this long!
