US federal income tax

No, Universities Superannuation Scheme itself is not a PFIC.

Investment in a PFIC can result in additional tax liabilities and reporting requirements under US tax law.

Please note: The information described in this FAQ is based on USS’s understanding of US federal income tax requirements at the date of publication, is for general guidance only and does not constitute tax advice. It is not a legal document and does not explain all situations or eventualities. Any changes in US tax law or requirements and/or the USS Scheme Rules may affect this information. We recommend that members seek their own tax advice before making any decisions or refraining from making any decisions in relation to their USS pension/their US tax position.

Yes, Universities Superannuation Scheme sometimes invests in entities which would be considered PFICs.

Please note: The information described in this FAQ is based on USS’s understanding of US federal income tax requirements at the date of publication, is for general guidance only and does not constitute tax advice. It is not a legal document and does not explain all situations or eventualities. Any changes in US tax law or requirements and/or the USS Scheme Rules may affect this information. We recommend that members seek their own tax advice before making any decisions or refraining from making any decisions in relation to their USS pension/their US tax position.

Yes, Universities Superannuation Scheme meets the definition of a pension scheme under the Convention.

The Convention includes a number of provisions which specifically address the tax treatment of membership of a UK pension scheme. A member of USS with US citizenship who meets the eligibility requirements of the Convention can benefit from these provisions and is not required to include income from his or her interest in Universities Superannuation Scheme on the US federal income tax return until a distribution is received. The provisions of the Convention apply to both the DB and DC elements of the scheme.

Please note: The information described in this FAQ is based on USS’s understanding of US federal income tax requirements at the date of publication, is for general guidance only and does not constitute tax advice. It is not a legal document and does not explain all situations or eventualities. Any changes in US tax law or requirements and/or the USS Scheme Rules may affect this information. We recommend that members seek their own tax advice before making any decisions or refraining from making any decisions in relation to their USS pension/their US tax position.

Yes, in the unusual case when a member has made aggregate contributions to the Universities Superannuation Scheme (including the DC element) that exceed in amount the contributions made by the employer. Even in that case, however, there is potentially a position that can be taken under the Convention that the member should not need to report income from the PFIC on his/her US tax return (prior to distribution), or file IRS Form 8621 "Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund" with such return.

Please note: The information described in this FAQ is based on USS’s understanding of US federal income tax requirements at the date of publication, is for general guidance only and does not constitute tax advice. It is not a legal document and does not explain all situations or eventualities. Any changes in US tax law or requirements and/or the USS Scheme Rules may affect this information. We recommend that members seek their own tax advice before making any decisions or refraining from making any decisions in relation to their USS pension/their US tax position.

Subject to individual circumstances, a member with US citizenship may be required annually to report his or her interest in USS to the IRS as follows:

• Form 8938 – Statement of Specified Foreign Financial Assets (only if the aggregate value of the member's "specified foreign financial assets" exceeds the applicable reporting threshold).
• Form 3520 – Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts (only in the unusual case when member contributions exceed employer contributions, and then with respect to that portion of the scheme attributable to member contributions only).
• Form 3520A – Annual Information Return of Foreign Trust With a U.S. Owner (required from individuals who oversee foreign grantor trusts that have U.S. taxpayer beneficiaries; applicable if the member contributions exceed employer contributions).
• FinCEN Form 114 – Report of Foreign Bank and Financial Accounts (used to report US Member’s interest in a foreign financial account).

Please note: The information described in this FAQ is based on USS’s understanding of US federal income tax requirements at the date of publication, is for general guidance only and does not constitute tax advice. It is not a legal document and does not explain all situations or eventualities. Any changes in US tax law or requirements and/or the USS Scheme Rules may affect this information. We recommend that members seek their own tax advice before making any decisions or refraining from making any decisions in relation to their USS pension/their US tax position.

US taxation is a complex area which could have significant financial implications for those members with US citizenship. We therefore recommend that such members seek specialist tax advice from a US qualified tax adviser as to whether they should make any report on their US tax return and/or be filing any returns with regard to the scheme. Please note that the trustee is not authorised to provide any financial, investment or tax advice and is unable to complete any forms on your behalf. These FAQS are intended to provide general guidance only and should not be relied upon by members when making, or refraining from making, any decisions. This is not a legal document and does not cover all situations and eventualities - the trustee does not accept any liability if members rely on the information in these FAQs.

Please note: The information described in this FAQ is based on USS’s understanding of US federal income tax requirements at the date of publication, is for general guidance only and does not constitute tax advice. It is not a legal document and does not explain all situations or eventualities. Any changes in US tax law or requirements and/or the USS Scheme Rules may affect this information. We recommend that members seek their own tax advice before making any decisions or refraining from making any decisions in relation to their USS pension/their US tax position.