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  • RE: USA Beneficiary IRA distribution

    I am in a similar position in that I inherited a beneficiary IRA but the provider does not deal with Non resident aliens and required that the whole IRA be cashed out. The sum amounts to several hundred thousand dollars. What is this classed as and where do I declare it, and will I be paying 45% on everything over £125k.
  • RE: Inherited IRA Distribution

    Thanks for the reply Paul Dev. Unfortunately I am now confused so hopefully you can help clarify if I put some fictitious numbers to the query. At the time of my relatives death her IRA was valued at $250,000 which transferred to my name. The IRA company does not allow non resident alien to hold IRA to required the account to be paid to me. After two months I received an initial cheque for $242,400, Fifteen days later I received a second cheque for $2599.50 and two months later a final cheque for $0.50 for a Total of $245,000 Are these payments classed as distributions and therefore subject to UK tax, and if that is the case, I assume I will be taxed at standard tax rates (i.e. 20%, 40% 45%) . If that is the case I would have been better paying US tax of 30%
  • Beneficiary of US Fixed Term Annuity

    A Relative (US Resident / US Citizen) at the time of her death was in receipt of a Fixed Term Annuity. The Annuity started payment in 2016 and is due to pay a fixed sum, monthly for 10 years. There was no beneficiary to the annuity so the annuity transferred to her Estate. I am the beneficiary of the Estate (UK Resident / UK Citizen) and the annuity has now transferred to me. There is no option to cash in the annuity and therefore it will pay out, (to me,) a fixed sum until 2025. The annuity is paid with no US tax withholding. Do I need to declare these payments on my UK self assessment (foreign income), or are they classed as my inheritance and therefore free from Tax. (There are no interest Payments).
  • RE: Inherited IRA Distribution

    Thank you for the information, that helps greatly. Could I clarify that the Initial assets added to the transitional IRA account would be classed as the lump sum. There were no payments made from the account until the assets were sold. During this time there were some small increases in value but overall the value had reduced by 2% so the value I received was less than the initial lump sum so I assume there would be no tax to be paid. (The money is currently in an interest bearing bank account and I understand that any interest is subject to UK Tax.
  • RE: Inherited IRA Distribution

    I believe I did. I have spoken to a US Tax accountant who believes I need to pay US taxes on the amount. The local agents for the IRA were stumped as they had never had to deal with a foreign beneficiary before, but the head office advised that obtaining an ITIN was not required for distributions on a foreign account. They have recently issued Form 1042-s (Foreign Persons US Source of Income Subject to Withholding). with an exemption listed as 3 "Exempt under Tax Treaty" 15 "Payee not subject to Chapter 4 Withholding". I have searched all over but cannot find anything that covers this situation.
  • Inherited IRA Distribution

    A 78 year old relative recently passed away in the USA. They were a US Citizen and Resident. I found out I was the sole beneficiary of their traditional IRA. (I am a UK Citizen and Resident) The IRA was converted to a beneficiary IRA before being paid out as a lump sum. (There were no other options). There was no withholding for US tax purposes. Do I need to declare this as foreign income or is this part of my inheritance. (I was left assets from their will). If I need to declare it, could anyone tell me what are the potential tax implications.