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Posted Mon, 02 Dec 2024 17:24:46 GMT by Anne Drysdale
Are regular distributions from the US government Thrift Savings Plan taxable in the UK?
Posted Tue, 03 Dec 2024 09:04:40 GMT by HMRC Admin 19 Response
Hi mark bartram,
If you qualify for split year, then you only report any foreign income for the UK part of the year. You can see guidance here:
RDRM12000 - Residence: The SRT: Split year treatment
If you do not qualify then you will need to report all your foreign income to the UK. Please see the following guidance:
Tax on foreign income
The guidance below will help you work out if split year treatment applies.  
RDRM12150 - Residence: The SRT: Split year treatment: Case 4: Starting to have a home in the UK only
Thank you.
 
Posted Wed, 04 Dec 2024 11:59:37 GMT by HMRC Admin 17 Response

Hi ,
 
It is only for actual paid out pensions prior to that date .

Thank you 
.
Posted Fri, 06 Dec 2024 12:08:03 GMT by HMRC Admin 20 Response
Hi TonyD ALD,
There is no legislative definition of a Lump Sum but HMRC regards these as being any non-periodic payment of a pension -
That is, any non-regular payment that decreases the value of the remaining pension pot after such payment is made.
For example, the first (IRA) withdrawal is taken in year 1, the next withdrawal was made in year 5, and another withdrawal in year 7;
such payments will not be regarded as periodic and will be treated as Lump Sum’s under the UK/USA DTA.
Whereas any amount withdrawn in set, periodic, frequent intervals (e.g. weekly, monthly, annually etc.) would not be a Lump Sum, but rather periodic payments. 
Thank you.
Posted Fri, 06 Dec 2024 12:11:42 GMT by HMRC Admin 20 Response
Hi Anne Drysdale,
Periodic, frequent, payments or withdrawals (e.g. weekly, monthly, annually etc.) payments are taxable within the UK and ‘maybe’ exempt from US tax.
This is in accordance with Article 17(1)(a) of the DTA.
Thank you.
Posted Fri, 06 Dec 2024 12:43:08 GMT by TonyD ALD
Hi Admin20, I appreciate your reply but I had already read HMRC's definition of Lump Sum and I was seeking further clarification for my situation ie. ad hoc withdrawals each year, where I initiate each withdrawal with respect to date and amount, not regular pre-arranged payments. I think these are multiple lump sums but I don't know if that is correct. Please see my previous post also. Thank you.
Posted Wed, 11 Dec 2024 16:25:42 GMT by HMRC Admin 10 Response
Hi
This forum is for general queries only and is intended to help you self-serve. We are unable to provide specific advice tailored to individual circumstances. 
 
Posted Tue, 24 Dec 2024 09:10:29 GMT by doctor-sparks
In common with several posting here, I am a UK citizen with a 403B fund arising from employment in the US. However I differ because I do not need a lump sum, and can explore more tax efficient options… My proposal is to Draw down my 403B pension pot through periodic payments, taking the entire amount over a few years. I would aim to set the level of payment to minimise any tax. I understand that in the UK, such pension payments count as income, so I would need to look at my annual allowances. My questions are, one) is it possible to take the entire 403B fund in this way, and two) what would be my tax liability in the US? Many thanks for any help you can offer…
Posted Thu, 26 Dec 2024 11:03:13 GMT by Philip Underhill
Please can you confirm my understanding, based on previous posts and answers here: A US Individual Retirement Account (IRA) is NOT recognized as a pension account by HMRC, but an employer-sponsored 401-K retirement account IS recognized as a pension account by HMRC? Also, do I understand correctly that withdrawals from an IRA, regardless of whether they are periodic or lump sums will simply be treated as income by HMRC? Is it possible to transfer a lump sum from an IRA into a UK private pension scheme without incurring UK tax? Do you know how the US would treat such a withdrawal from an IRA for a US citizen?
Posted Fri, 10 Jan 2025 15:45:42 GMT by HMRC Admin 20 Response
Hi doctor-sparks,
This will be treated the same as 401k pensions.  
Payments made by the individual into an IRA, are made after tax relief is given to the individual by the employer.  
Payments from this pension are taxable in the USA.  
HMRC do not recognise IRA schemes as pensions, so for UK residents, they are taxed as income under the interest and declared as foreign interest on a tax return (SA106).  
There is no US taxation if the pension is subject and liable to UK tax.
If US tax is withheld, then the individual,  should seek a refund of this tax (file a form 1040NR).  
HMRC will not give a credit for this tax against any UK tax charged on this income.    

Payments made into a Roth IRA are made before tax relief is given. As a result, payments from this account are not taxable in the USA.  
HMRC recognises this account as a pension scheme and as it is not taxable in the USA, it is not taxable in the UK either.
Thank you. 
Posted Mon, 13 Jan 2025 15:09:25 GMT by HMRC Admin 8 Response
Hi,
Payments made by the individual into an IRA, are made after tax relief is given to the individual by the employer.  
Payments from this pension are taxable in the USA.  
HMRC do not recognise IRA schemes as pensions, so for UK residents, they are taxed as income under the interest and declared as foreign interest on a tax return (SA106).    
There is no US taxation if the pension is subject and liable to UK tax.
If US tax is withheld, then the individual,  should seek a refund of this tax (file a form 1040NR).  
HMRC will not give a credit for this tax against any UK tax charged on this income.   
Payments made into a Roth IRA are made before tax relief is given.  As a result, payments from this account are not taxable in the USA.  HMRC recognises this account as a pension scheme and as it is not taxable in the USA, it is not taxable in the UK either, 
Thankyou.
Posted Tue, 04 Mar 2025 17:19:31 GMT by ROBERT LOCHHEAD
My primary residence is in the USA. May I rent a home in the UK for a full year at a time, but stay in it for 3-4 months a year.
Posted Fri, 07 Mar 2025 11:49:53 GMT by HMRC Admin 21 Response
Hi ROBERT,
There is nothing from a tax perspective, to prevent you from renting a residential property in the UK.  
The number of days that you can remain in the UK and not be tax resident, will depend on your individual circumstances.  
You will need to review the guidance on residence at RDR3 (RDR3 Statutory Residence Test) and take the statutory residence tests to find out now long you can stay in the UK and not be liable to tax on your world-wide income.
Thank you.
Posted Fri, 18 Apr 2025 21:23:02 GMT by ste fen
Hello! Thx for all your help on these pages. Would you please clarify the earlier response? : Posted 7 months ago by HMRC Admin 20 Response Hi Rob, Article 17(2) of the UK/USA DTA provides the US with the right to tax any Lump Sum payment which is made from a US sourced pension scheme (including IRAs). However, the UK is also permitted to tax the same lump sum payment(s), which is in accordance with Article 1(4) of the DTA. A UK resident… My question, to help me with my future self assessment: For a US citizen, resident in U.K., with normal USA IRA, please explain again the difference between U.K. treatment of tax for lump sum and for regular withdrawals transferred to U.K. It seems that in lump sum scenario, US tax is due then further U.K. tax is due (because of higher U.K. tax rates?) and in the regular withdrawal scenario, no US tax is due and all tax is due in U.K. . Is that right? Thank you! Ste.
Posted Wed, 23 Apr 2025 09:57:43 GMT by James
Hi, 9 months ago I posted in this forum and HMRC Admin 10 Response confirmed that 25% of regular withdrawals from a US 401K would be UK tax free for me as a UK citizen and resident. Can you please advise where in Self Assessment you claim this tax relief ? When I enter the amount as foreign pension income the tax calculation adds this to other income and calculates the tax without the 25% deduction. Can I enter 75% of the income and add a note to explain that this is what I have done ? Thanks.
Posted Thu, 24 Apr 2025 15:14:03 GMT by HMRC Admin 20 Response
Hi ste fen,
There is no legislative definition of a Lump Sum but HMRC regards these as being any non-periodic payment of a pension - That is, any non-regular payment that decreases the value of the remaining pension pot after such payment is made.
For example, the first (IRA) withdrawal is taken in year 1, the next withdrawal was made in year 5, and another withdrawal in year 7; such payments will not be regarded as periodic and will be treated as Lump Sum’s under the UK/USA DTA.
Whereas any amount withdrawn in set, periodic, frequent intervals (e.g. weekly, monthly, annually etc.) would not be a Lump Sum, but rather periodic payments. 
Thank you.
Posted Mon, 28 Apr 2025 10:26:46 GMT by HMRC Admin 17 Response

Hi ,
 
The 25% tax free is not applicable on foreign pensions.

The full amount should be declared and then claim any relevant foreign tax credit relief for tax paid abroad .

Thank you .

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