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Investing in United Kingdom Pension Schemes as a U.S. Expat

Saving for retirement while overseas can be a complex situation. Knowing what strategy works for your tax situation can help you avoid double taxation. Find out how participation in U.K. Pension Schemes impact your tax situation.

  1. Benefits provided under the United States – United Kingdom Tax Treaty allow you to take advantage of pensions and retirement arrangements while living and working in the U.K. For the most part, these arrangements will operate much in the same way as they would if you were living in the U.S. and contributing to a 401(k) or IRA.
  2. For 2018, you may be able to deduct or exclude up to $55,000 ($61,000 if age 50 or older) of contributions to a qualified UK pension scheme for U.S. tax purposes. This can overcome the problems that often arise when U.S. taxpayers participate in foreign pension arrangements and end up being double taxed because of the timing of the tax event in each country.
  3. As an American expat living in the U.K. you will have a number of options to save for retirement in a tax efficient way. Every situation is unique and your H&R Block Expat Tax Advisor can help figure out a strategy.