Until recently retirement in the U.S.A. have been frustrating due to a lack of a suitable visa. The USA has no retirement visa and so all too often unless you apply through the E2 or L1 visa programs and bought a business it remained a pipedream – Plus both the E2 and L1 visas are for limited terms and do not provide permanent residence. But now there is finally a proven option, the EB-5 visa program.
Now You Can Retire to the USA using your UK Pension
For those looking to emigrate to the USA, an EB5 visa, is a fast and attractive solution. It allows the applicant and their family, permanent rights of residency as long as the terms of the visa are met.
For those looking to utilise an EB5 visa, you will need to allocate at least $500,000. This money would usually need to be raised from your own cash savings and may impact on your ability to emigrate due to the other costs involved when moving to another country.
The UK / USA cross border financial planning team at Alexander Beard appreciate that it may be difficult to fund an EB5 from available cash therefore we have created a solution that will allow you to use your UK pension.
EB5 Visa Pension Funding Solution
Your pension is an asset that is difficult to access before age 55 therefore would not ordinarily be of use to fund the visa. However, your pension does have flexibility in the underlying assets it can invest in and this provides options for you to use your pension to fund your visa.
Once the EB5 investment term has finished, the investment value of the EB5 is returned to your pension and can then be used to provide an income for you in retirement.
This solution does utilise a Qualifying Recognised Overseas Pension Scheme (QROPS), which should only be entered before you become resident in the USA. Should the transfer take place after you become a US resident, it may result in a taxable event. QROPS are not Financial Conduct Authority regulated.
A key part of ensuring that QROPS are a good retirement vehicle is that there is investment diversification within the pension. An EB5 visa investment tends to be very concentrated, therefore it’s important that your pension is sufficiently diversified beyond the use of the EB5. Alexander Beard can offer GBP and US$ denominated, Internal Revenue Service compliant investment options that can run in conjunction with whatever EB5 investment is selected.
Another thing to be mindful of are the currency implications that utilising an EB5 will have on your pension. The EB5 will be denominated in US$ and your pension would naturally be in GBP. We always recommend that guidance is provided by a regulated currency broker so you minimise currency risk. It is of course possible to exchange only the required amount of fund to achieve $500,000. Any remaining pension funds can be held in GBP or most other major currencies.
Using your pension to fund an EB5 is by no means a straightforward exercise. Advice does need to be taken to see if it is in your interests to do this. Alexander Beard has the experience and knowledge to help you in this area of visa and pension planning. We can help provide the advice and then implement the EB5 pension solution. Alexander Beard do not provide advice with regards to the selection of the EB5 Regional Center.