NewsAisa International: New U.S. Rules Can Tax British Pensions Transferred to QROPS

These rules could affect investors who are or were U.S. residents or citizens when they transferred a British pension to a Malta QROPS.

If you transferred a British pension into a Malta or other offshore Qualifying Recognised Overseas Pension Scheme (QROPS) account, you may have to pay unexpected taxes to the U.S. Internal Revenue Service (IRS) this year.

In June of this year, the U.S. IRS and Treasury published a proposal on the Federal Register that, if implemented as it stands, designates participation in a Malta Retirement Account as a “listed transaction”. The effect of this would be to regard the holding of Malta pensions as potentially tax abusive.

While there are exceptions within the new proposal, it is likely that the vast majority of those who were U.S. residents at the time of the transaction will not qualify for the exception.

The text of the proposal can be found here.

If you have a QROPS that could be affected by the new rules, you should speak to an appropriately qualified U.S. tax adviser and seek local pension and investment advice in the Czech Republic. Aisa International is happy to answer any questions.