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Posted Fri, 20 Jan 2023 14:23:41 GMT by Findlay Wye
Hello, I took a distribution from a beneficiary IRA in the USA this year. This is NOT a Roth IRA. Where in the self assessment form should I report this? Foreign income, obviously, but in Overseas Pensions? Or 'other income'? Also, I was not liable for tax on this distribution in the USA as my overall income was below the personal allowance. Does this mean that it is not taxable here either? Thanks.
Posted Tue, 24 Jan 2023 10:42:33 GMT by HMRC Admin 17

UK/US citizens resident in the UK are taxable on their IRA interest in the UK. 

IRA's are treated differently from Roth IRA's, in that they are taxable in the UK under foreign interest. 

The gross interest would be declared in the self assessment tax return, using the supplementary page SA106. 

The interest would be treated in the same way as UK interest and attract that starting rate of £5000.00. 

Have a look at :

Tax on savings interest  . 

DT19852 implies that tax is not payable in the USA on this interest  .

Thank you.
Posted Tue, 24 Jan 2023 13:48:27 GMT by Findlay Wye
Thanks for your reply. I understand how to declare interest, but this isn't really interest as I understand it. This is a beneficiary IRA, meaning that it isn't a pension that I contribute to. I inherited it and am required to take a minimum distribution (RMD) from it each year. In Dec 2021, I took out $10,000. I understand that this is taxable in the UK, and also that I can claim FTCR. Is this considered interest by the HMRC? If not, where should this be declared? As it is essentially a sale of stocks and shares (though in a mutual fund), would I be taxed on the capital gain, rather than the full amount? Thanks again.
Posted Thu, 26 Jan 2023 15:08:31 GMT by HMRC Admin 25
Hi Findlay Wye,

This would be declared as foreign interest on your tax return.

 You can claim foreign tax credit relief if any tax has been deducted in the USA on the income.

Thank you. 

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