UK/US - Pension funds have been disappointed by delays to a treaty that is set to harmonise tax relief on pensions for employees transferred between UK and US companies.
Ratification of the UK/US tax treaty – currently in the hands of the MPs and senators – was expected before the end of 2002.
The document is intended to allow employees transferred between the US and UK to remain in their home country pension arrangement without suffering adverse tax consequences such as double taxation.
Hammond Suddards Edge senior solicitor Frances Phillips-Taft said a number of concerns have been raised by pension fund clients over when the treaty would be ratified.
But she said that it was unlikely the government would move quickly to ratify the treaty.
“The last treaty took five years to ratify so we’re not expecting a quick resolve,” she said.
Phillips-Taft added that once the treaty has been ratified by both parties it will come into effect in the US on the following January 1 and in the UK on the following April 6.
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