Foreign pension plans are often useful, tax-efficient investment tools for US taxpayers, but complexities occur when pensions are treated differently in each jurisdiction, and how they are reported to the IRS.


Pensions, like other investments, are often tax-favored in one jurisdiction but unfavorably taxed in another. Pension plans include state pensions, workplace pension plans and personal (private) pension plans.   

A US Person participating in a foreign pension will be taxed by the US on employer contributions to the plan, as well as the growth in the plan, even though some foreign tax systems allow a tax deferral or even a tax reduction. This tax mismatch may be reduced or eliminated under the various tax treaties the US has in place.

Furthermore, complexities arise with how foreign pension plans are reported to the IRS, considering the substantial US tax penalties associated with non-compliance, including incorrect or missing US tax forms. Although generally, US pension plans are straightforward to report, a foreign personal pension plan may be viewed as a Foreign Grantor Trust (for US tax purposes). This is because the investor has a certain level of control over the investments and distributions and is considered the plan “owner.” The result is additional US tax filing requirements, and these are not always easy to navigate.

We come across several types of foreign private pension plans with the most notable being SIPPs and SASSs in the UK and Malta Pension Plans.

Our Advisory Services

We assist large and small pension providers who have US members invested in their foreign pension scheme. We help you navigate your trustee obligations by preparing US tax forms (Form 3520-A) to submit to the IRS and providing your US members with Form 3520-A Foreign Grantor Trust Owner Statement (and supporting statements) to assist the US members in meeting their personal US tax filing obligations in respect to the foreign pension plan.

We also partner with pension fund providers and trustees to help establish internal systems that offer good quality data and US tax compliance, thus ensuring you meet your trustee obligations.

We also assist US taxpayers with filing their pension related forms, including an analysis of any US tax treaty claims which may be applicable.

Our Compliance Services

Pension plans with US connections have extensive US reporting requirements for the pension providers and US taxpayers.  

Failure to file the returns and reports in a timely manner, or incorrectly, can result in substantial penalties.

We have significant experience with foreign pension plans

US taxpayers often participate in foreign pension plans as these can be useful, tax-preferred, investment tools in the jurisdiction where they are a tax resident, but pensions can be treated differently between jurisdictions.  Complexities also arise when reporting to the IRS, a concern given the substantial penalties for non-compliance. But we can help you to comply, whether you are a US individual or a pension provider. Contact us to find out how we can support you.