SIPP Reporting on the FBAR and FATCA Form 8938
A SIPP is a Self-Invested Personal Pension and a common investment tool for United Kingdom residents seeking to save for retirement. It is similar to a US 401K in that the contributions and growth both receive tax-deferred treatment. One additional benefit to this type of foreign pension/retirement vehicle is that allows the investor to select and manage the investments — so that the Taxpayer has the opportunity to oversee the investment — and make decisions about which investments are included in the SIPP. A common question we receive is that once a UK resident becomes a US Person and becomes required to file annual international information reporting forms – is the SIPP required to be included on the FBAR and FATCA Form 8938?
SIPP is Reported On the FBAR
In general, the SIPP is required to be included on the FBAR (FinCEN Form 114) which is used to report foreign bank and financial accounts. The form name “FBAR” can be confusing, because oftentimes taxpayers presume (understandably so) that the FBAR is limited to bank accounts. But, since the account is held at a foreign financial institution, it would be reportable on the annual FBAR.
SIPP is also Reported on Form 8938
In addition to having to report the SIPP on the annual FBAR — it is also required to be reported on Form 8938 — which was developed in accordance with FATCA (Foreign Account Tax Compliance Act). Since the SIPP is a type of foreign pension, and Form 8938 requires the disclosure of foreign pension plans – the SIPP is also reportable on Form 8938.
Amnesty for FBAR & FATCA Form 8938
The FBAR and FATCA Amnesty Programs are programs developed by the Internal Revenue Service to assist Taxpayers who are already out of compliance for non-reporting, including non-reporting of SIPPs.
Some of the more common programs include:
Can I Just Start Filing for FBAR & FATCA This Year Instead?
No, unless the current year is the first year you had an FBAR/FATCA reporting requirement for the SIPP. If you had a prior year reporting requirement, but only begin to start filing in the current year (Filing Forward) it is illegal. In the world of offshore disclosure, this is referred to as an FBAR Quiet Disclosure. The IRS has warned taxpayers that if they get caught in an FBAR/FATCA Quiet Disclosure situation, it may lead to willful penalties and even a criminal investigation by the IRS Special Agents.
Our FBAR/FATCA Lawyers Represent Clients Worldwide with SIPP Reporting
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Contact our firm today for assistance.