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Posted Thu, 12 Sep 2024 15:06:30 GMT by Ragman0408 Garrad
I have lived in the US for 24 years and am a US citizen. I retired at the end of last year and have a pension in the UK with Standard Life (2 annuities and 1 pension plan). I have been told that I will have to take it as a lump sum and will be taxed at 40% , taken out at source. As a US taxpayer will I be able to claim a refund on the tax paid and pay the tax due in the US under the UK US tax treaty? How do I go about this and what is the process and forms to be filled to enable this. I have been told different things and want to be sure of doing the process correctly to avoid being taxed twice.
Posted Mon, 23 Sep 2024 08:09:42 GMT by HMRC Admin 19 Response
Hi,
A lump sum payment derived by a resident of the USA from a pension scheme established in the UK, shall be taxable only in thet UK. The provision preserves the exemption from Income Tax of a lump sum relevant benefit where it is paid by a UK approved pension scheme to a beneficial owner who is a US resident. However, Article 1(4) will apply in respect of US citizens as the provisions of Article 17(2) are not amongst those listed at Article 1(5). So, the US can tax lump sums received by US citizens from UK schemes.
USA: tax treaties
Thank you.

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