Timothy Gosling

Can I please confirm my understanding of this, as looking through the previous posts I am still a little confused. A US citizen who has been living, working and paying tax in the UK for the last 30 years wishes to make a withdrawal from their 401K. This will be taxed in the USA at 30% at the point of withdrawal. The whole sum withdrawn will be treated by HMRC as taxable income and must be accounted for on their UK tax return, which will push this person into the 40% rate tax bracket If I quote the posting by HMRC Admin 19: HMRC will tax the pension lump sum at 40% and you claim a credit for 30% paid in the USA. This credit is set against the tax chargeable in the UK, reducing the amount payable. Therefore on the UK tax return 40% tax will be charged, but 30% will be offset against this leaving just the additional 10% to pay. If however, the UK tax was to be less than the 30% already charged by the IRS a refund could be claimed by submitting a form 1040NR – Foreign tax credit relief to the IRS. Could you please confirm that my understanding is correct? How would we demonstrate on the UK tax return that the 30% interest has been charged? Thank you for your help on this.