USA Decedent IRA treatment of interest and RMD

I have a "decedent" IRA from my father in the US and have a question about how I should treat the interest earned and then later withdrawals. (I understand from previous posts that the interest earned in an IRA is taxable, per the DTA. I believe - also from previous posts but I'm less clear on this point - that periodic withdrawals are taxable as foreign pension income but lump sum withdrawals are not.) Let's assume I have an IRA that earns 500 GBP in interest in year 1, then 500 GBP interest in year 2, then I withdraw 1000 GBP in year 3 and 1000 GBP in year 4 (drawing down the account) How and when should I declare this on my self-assessment? Specifically, do I declare and pay the interest in year 1 and 2? If so, do I ALSO have to pay income tax on the withdrawal in year 3? Kind regards, Peter

Hi Peter H

HMRC does not regard IRAs as pensions.  They are treated as investment accounts and attract interest.  Both periodic withdrawals and lump sums are treated as interest and taxed as such, in the foreign interest section of SA106.  
You can claim a foreign tax credit of up to 100% of the foreign tax paid.

Thank you