Just to add, I have reviewed HMRC's response to the forum post below which appears to be the same issue as mine and advises there is tax due on the annual drawdowns and should be declared as foreign interest, with the lump sum no tax due being that it forms part of the inheritance.
If you can please confirm this it would be much appreciated,
Hi Can you please advise as I would like to make sure that I am declaring and treating my Inherited IRA income correctly, as reading the forum I am seeing different answers. I inherited a Vanguard IRA when my father passed away and I have been declaring the mandatory drawdown once a year and detailing it as Foreign Pension Income on my tax return and paying tax at 20%. This was advice from my accountant at that time. 1) can you please confirm whether it should be declared as a Foreign Pension, or is this incorrect and it should be declared elsewhere? (I note someone was declaring it as Foreign interest) 2) Is this mandatory drawdown definitely taxable? 3) If I draw the full sum and close the account, is this taxable? As again i have seen different answers ont he forum. Thank you,