Hi guys, I'm in a bit of a pickle and could really do with some advice.
It seems like even before I mistakenly thought I no longer to have to file US tax returns, I was already in trouble thanks to incomplete guidance from pub 54 the Expat's Tax Guide. There was nothing about the forms required for reporting foreign mutual funds and pensions (nor guidance for foreign personal service LLC). So I filed as I would have if I had stayed in the States.
Just found out about the inappropriateness of UK mutual funds for anyone with US connection. I have retirement savings invested in accumulation unit trusts via ISAs and ex-employers pension schemes. I'm trying to estimate the damage and figure out the best way forward.
For the ISAs...
- Would I have to file PFIC form 8621 for each fund for each year or only when I sell?
- There are mentions of "distributions", does that apply to accumulation funds?
- Would I have to sell them all? What sort of tax & filing liability would I be looking at?
- If I keep them and decide to give up my US citizenship later would I have to pay exit tax on them? (No, I'm nowhere near the $2mil net worth nor the $139k tax liability.)
For the ex-employers pensions...
- Are these considered as PFIC as well? One plan is still shown as a "Group Personal Pension Plan", the other was originally labelled "Company Pension" then changed to "Personal Pension" when I left that employer. Both had some employer contribution. I haven't paid into either after leaving the employment, though one had automatic contributions for a while from contracted out state pension. I've never tried to claim any relief for pension contribution as my earnings have been below FEIE most years anyway.
- What sort of tax implication and/or form filing should I be mindful of?
- Again would it be advisable to get rid of these pension savings?
I know I will have to get professional help - seems like every "US Person" who moved aboard needs an army of specialist advisers even if they're not earning much. But I'd really appreciate second opinions before some unverifiable 'expert' along with Uncle Sam take me to the cleaner.
So much for trying to be prudent by saving for retirement. Thank God I didn't try to save more.
