69. Retiring Abroad: Will Your UK Tax-Free Lump Sum Be Taxed in the US?

Upcoming changes to financial legislation mean many British expats should seriously rethink how and when they access their UK pensions. From April 2027, unused UK pensions are expected to be included in the UK inheritance tax (IHT) net as UK‑situs assets. For long-term expats with sizeable pensions, this could mean a potential 40% tax hit on what’s passed to heirs.   In this episode of Expat Wealth, Richard Taylor – dual UK/US citizen and Chartered Financial Planner – is joined by Chris Hall – International Income Tax & Social Security Specialist at PKF O’Connor Davies – to discuss the upcoming UK IHT changes. They explore the importance of UK pension reporting upon arriving in the US, whether opening a Self-Invested Personal Pension (SIPP) makes sense, and how to design a coordinated retirement income and inheritance strategy.   Richard and Chris take a detailed look at: IRS pension reporting requirements and how they apply for expats in the US. Pension Commencement Lump Sums (PCLS) and whether they are truly tax-free for UK expats in America. UK inheritance tax changes and what they mean for unused UK pensions held by persons living abroad. Strategic financial planning before, during, and after moving abroad, including retirement and estate considerations.   --   Expat Wealth is supported by Plan First Wealth. Plan First Wealth is a Registered Investment Advisor serving fellow expatriates and immigrants living across the US on matters such as retirement planning, investment management, tax planning and non-US asset management.   https://planfirstwealth.com/   --   Expat Wealth is affiliated with Plan First Wealth LLC, an SEC registered investment advisor. The views and opinions expressed in this program are those of the speakers and do not necessarily reflect the views or positions of Plan First Wealth.  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 listeners seek their own advice in these areas.