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  • RE: IRA Withdrawal - where to declare on self assessment

    I am concerned about the apparently conflicting statements and claims I find in these pages on Traditional IRA withdrawals as a lump sum. The US-US Double Taxation Convention of 2003, which is in force, states in Article 17 (1) and (2): Pensions, social security, annuities, alimony, and child support 1. (a) Pensions and other similar remuneration beneficially owned by a resident of a Contracting State shall be taxable only in that State. 2. Notwithstanding the provisions of paragraph 1 of this Article, a lump-sum payment derived from a pension scheme established in a Contracting State and beneficially owned by a resident of the other Contracting State shall be taxable only in the first-mentioned State. Note the clause 'other similar remuneration'. A Traditional IRA is a retirement financial vehicle which functions exactly like a UK Private Pension scheme, in that its growth and value is not taxed until the funds are withdrawn, and they cannot be withdrawn before the age of 59 1/2. Note too that defines that ‘Private pension schemes are ways for you or your employer to save money for later in your life.' That is exactly what a Traditional IRA is also designed for. On what basis then does HMRC claim that a Traditional IRA is not 'other similar remuneration'? I would suggest that the Convention arrived at their statement and the specified definition (other similar remuneration) to ensure that the two systems were equivalent. By the way, I did consult a Specialist Tax Adviser who quoted me these clauses in the Convention to show that 17 (2) is in force.