Can a US Resident Transfer Their UK Pension to the USA?

In short: no, you can’t transfer your UK pension directly into a US retirement plan such as a 401(k), Roth IRA, or Traditional IRA.

Here’s why:

• UK law only allows overseas transfers into Qualifying Recognised Overseas Pension Schemes (QROPS).
  
• No US retirement vehicle currently has QROPS status with HMRC.
  
• Any attempt to transfer directly to a US plan could be classed as an unauthorised payment, resulting in a 55% UK tax penalty.
  

So, a “direct rollover” to a US plan is off the table. However, there are compliant, tax-efficient alternatives that let you consolidate and manage your UK pensions while living in America.

❌ Option 1: Direct Transfer to the USA

Not allowed under UK pension legislation.

• US retirement accounts are not QROPS-approved
  
• UK pension trustees are legally barred from transferring to non-recognised schemes
  
• Attempting it could trigger unauthorised payment tax charges up to 55%
  

✅ Option 2: Transfer to an International SIPP

The most practical, compliant route for US residents is a UK-regulated International SIPP (Self-Invested Personal Pension).

An International SIPP allows you to:

• Consolidate multiple UK pensions into one plan.
  
• Hold investments in USD or GBP, managing currency risk.
  
• Access flexible drawdown in retirement.
  
• Stay within FCA regulation, ensuring full UK consumer protection.
  
• Align investment management with US tax reporting requirements.
  
• Full beneficiary inheritance options available, whilst most UK pensions limit the options available for non-UK Resident beneficiaries.
  

At Cameron James USA, we specialise in identifying SIPP trustees and platforms that are willing to work with US-resident members and coordinating the entire process from end to end, including liaison with your UK trustees, fund managers, and US tax advisor, where necessary.

💡 Note: “International SIPP” is not a different legal product, it’s a UK SIPP structured specifically for non-UK residents, typically with USD-denominated portfolios, US bank withdrawals, and advice from non-UK i.e.SEC advisors.

⚠️ Option 3: QROPS — Why It’s Rarely Suitable for US Residents

QROPS (Qualifying Recognised Overseas Pension Schemes) are often marketed to expats, but they are almost never appropriate for those living in the US.

• Most QROPS are based in offshore jurisdictions like Malta, Gibraltar, or the Isle of Man
  
• Transfers can incur a 25% Overseas Transfer Charge (OTC)
  
• The IRS typically classifies QROPS as Foreign Trusts, leading to complex FATCA and PFIC reporting as well as transfer taxes and penalties.
  
• Most offshore trustees refuse US residents due to compliance and legal risk
  

In short, QROPS may work for EU or Australian residents, but for US clients they’re a regulatory red flag. A UK-based SIPP offers cleaner compliance, lower costs, and better IRS treatment.

Understanding UK–US Pension Taxation

Living in the US with a UK pension means navigating two tax systems: the UK’s HMRC and the US Internal Revenue Service (IRS).

Fortunately, the UK–US Double Taxation Agreement (DTA) prevents the same income from being taxed twice

How the Double Taxation Treaty Works

Under Article 17 of the UK–US DTA, pension income is taxable only in the country of residence (i.e. the United States), as long as you are a bona fide US tax resident.

That means:

• The UK does not tax your pension withdrawals once you’re US-resident.
  
• The US taxes your pension income as ordinary income.
  
• You avoid double taxation (but must still report all income to the IRS).

How the IRS Treats UK Pensions

The IRS treats your UK pension broadly like a traditional defined contribution plan, akin to a 401k or Traditional IRA:

• Withdrawals are taxed as ordinary income.
  
• Growth inside the pension remains tax-deferred until distribution.
  
• The UK’s “25% tax-free lump sum” is not automatically tax-free in the US, it’s typically treated as taxable income, but you can confirm this with your tax advisor.
  

In practice, this means tax coordination is critical.

At Cameron James, we work alongside your US CPA to structure withdrawals, conversions, and reinvestments efficiently across both systems, which is a natural process as we are financial planners, and cash flow modelling based around goal planning is the foundation of how we provide advice.

We also work with many independent third party tax advisors we can put prospective clients in touch with if their current CPA lacks the knowledge or confidence to assist.

Managing a UK Pension from the USA

As a US resident, you have two practical options:

1. Leave your UK pensions where they are, or
   
2. Transfer them into an International SIPP for US-compatible management.

Let’s examine both paths.

Option A — Leave your UK Pension alone

Pros:

• Maintains your UK regulatory protection (FCA + FSCS).
  
• Zero transfer costs.
  
• Familiar scheme and investment provider.
  

Cons:

• Some UK providers refuse to service US residents.
  
• Limited drawdown options outside the UK.
  
• Limited Beneficiary Inheritance options (often only option is to liquidate and take a taxable lump sum distribution)
  
• Can’t always hold USD or withdraw to US bank accounts.
  
• Ongoing admin and reporting difficulties.

This may work if your current UK provider supports non-UK residents, but many don’t, and even if they do, an International SIPP will provide full flexible access to a US resident, just like mainstream SIPP providers do for UK residents.

If you receive letters freezing your account or restricting trades, it’s a sign you should probably explore an International SIPP. An example would be Vanguard SIPP.

Option B — Transfer to an International SIPP

This is the preferred and most advised route for most US-resident clients.

Advantages:

• Full UK regulatory protection (still under FCA).
  
• Multi-currency holdings (USD/GBP).
  
• Consolidation of multiple old UK pensions.
  
• Global ETF investment choice.
  
• Flexible drawdown with US-aligned reporting.
  
• Seamless service if you later move countries or return to the UK.
  

How Cameron James Helps — Step by Step

Stage	Our Process	Your Outcome
1. Discovery Call	Review your situation, residency, goals	Clarity on options & next steps
2. Financial Review	Evaluate scheme types, charges, restrictions	Know which plans can transfer
3. Formal Advice	Compare schemes, costs, FX exposure, tax outcomes, options and our advised solution	See the advised solution and how much it all costs and the benefits it provides
4. Implementation	Coordinate trustees & providers	Smooth, compliant transition
5. Ongoing Financial Planning	Manage portfolios, financial planning, reporting assistance	Peace of mind & transparency

All clients receive a written Suitability Report, laying out every recommendation, rationale, and cost before proceeding.

Why Choose Cameron James USA

Cameron James (Cameron James USA) is one of the few advisory firms with advisors who are regulated and authorised by both the FCA (UK) and SEC (US), allowing us to serve cross-border clients transparently and compliantly. Whilst FCA advice is not applicable for US Residents, it is, in our opinion, a massive green flag, as it indicates your adviser works with UK residents and is at the forefront of UK pension financial planning.

We provide:

• Cross-border expertise: deep experience with UK–US pension and tax issues.
  
• Transparent pricing: no commissions or hidden charges, just clear, fee based advice.
  
• Global investment access: low-cost ETF portfolios aligned to your risk profile and US tax obligations.
  
• Personal guidance: one-to-one advisor relationships, not call-centre service. Financial Planning focused ongoing financial advice, centred around cash flow modelling and a holistic approach.
  

Our team has successfully helped numerous US-resident clients consolidate UK pensions and regain control of their retirement planning.