In this episode of Across the Pond, we're discussing the Social Security Windfall Elimination Provision, with the aim of providing useful information to British expatriates living in the US. While Social Security is a real political hot potato, it's one that is unlikely to be dropped - so it's worthwhile to understand these concepts fully before making decisions about your retirement. 

Social Security is more generous than most people think, with the retirement benefits, disability benefits, and survivors' benefits involved. Benefits are based on taxes paid on an individual's wages, with an entitlement built up over time. However...

The Windfall Elimination Provision (WEP) can affect British expatriates who have earned state pension benefits in the UK and are also eligible for US Social Security, and could impact expats in unexpected ways. WEP reduces the Social Security benefits for those who have not paid into the US Social Security system for a certain number of years. 

The good news is that the WEP reduction will not apply if you have been paying into Social Security for 30 years (i.e. your contribution record is 30 years or more). If you are interested in reducing your WEP penalty, then consider continuing to work and make SS contributions for the full 30 years (or as close as you can get).

Both of these are relevant and important topics for our clients and are very poorly understood, but Plan First Wealth is here to help! We hope you will listen and subscribe to learn more.

We often get asked, "I haven't lived in the UK in years, do I still get a state pension?"

There are a lot of questions that arise when it comes to UK state pension as a non-UK resident, which for our purposes means, as a US resident. 

Do you qualify for it? What's it worth? Is it worth claiming? What about WEP, should I be worried about my Social Security? Is it worth back-paying? What if I'm living abroad but not working? 

We get it, and we want to help you avoid any surprises when it comes to protecting your life's work.

In this episode of Across The Pond, we'll answer these questions and more, including eligibility parameters and voluntary contributions. Listen and subscribe to learn more!

Big picture, the last year was a tough year to be an investor, wasn’t it? The reality of it is, even relatively safe assets did not provide much safety while everybody was getting hammered. Inflation peaked at 9% and then remained stubbornly high, borrowing costs went through the roof, and the word ‘recession’ started getting thrown around a lot. So, what did this all mean for investors?

In this episode of Across The Pond: Market Musings - 2022 Review, Thomas and Richard zoom out and look at the big picture for stocks, pensions, interest rates, equities, and more as they recollect the events of the last year.

Plan First Wealth is a registered investment adviser.  Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies.  Investments involve risk and, unless otherwise stated, are not guaranteed.  Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.

Many US taxpayers who grew up in foreign tax systems, like in the UK, are unaware of some unique features to the US tax code.

For that reason, in Episode 07 of Across the Pond, we're covering two important topics: NT Tax Code (a UK thing) and US Reporting Compliance (a very American thing) which are markedly separate considerations, but both have implications for British expats.

An NT tax code relates to UK tax withholding. US reporting compliance deals with correctly filing your tax returns in the US. If you assume that just because your pension/income/asset is in the UK then you don’t have to report it or pay tax on it in the US, then you are making a huge mistake and setting yourself up for much bigger problems down the line.

Please note: we are not tax advisers and we do not give tax advice. That being said, due to our relationship with our clients and the vantage point we have over their affairs, we are often the first ones to spot possible issues, including the ones we are discussing here.

Plan First Wealth LLC is a Registered Investment Adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Plan First Wealth does not provide any tax and/or legal advice and strongly recommends that Clients seek their own advice in these areas.

We're talking about reporting and non-reporting funds for UK taxpayers. You might be wondering why we're doing this since we work with British expats, but the reason is simple: some people go back!

Reporting funds are a subset of “offshore”* collective investments where the fund has applied to HMRC for “reporting fund” status (all US funds & ETFs are by definition offshore funds to HMRC). Once this status is granted, the fund is required to report to the investor and HMRC details of the income that has arisen within the fund, and whether or not the income has been distributed to the investor.

If you found this information helpful, be sure to subscribe to our YouTube Channel for more content.

Plan First Wealth LLC is a Registered Investment Adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Plan First Wealth does not provide any tax and/or legal advice and strongly recommends that Clients seek their own advice in these areas.

It’s common for expats to own Non-US Investments (PFICs) and it’s usually a problem. 

Many people relocate to the US with existing collective investments, and many acquire them later on. For example, you inherit a GBP investment account and leave it as is because the exchange rate isn’t attractive.

Unless certain steps have been taken, most PFIC distributions will be considered “Excess Distributions” and will suffer punitive tax, interest, and reporting requirements in the US. This can get VERY expensive. 

If you own PFICs, address it ASAP. Waiting makes it worse! Listen to our latest episode of Across the Pond to learn more.