MuirisR

May I have a further clarification in respect of lump sum payments? You have said that one payment per year over a 10-year period would not be considered a lump sum payment. Do you know if this corresponds with the IRS interpretation? Would they accept that these periodic payments are taxable only in the UK (in accordance with Article 17.1 of Treaty, rather than Article 17.2, which states "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"? If IRS were to consider these as lump sum payments, would HMRC accept this also?

I have a couple of further questions. 1. If I take a series of lump sums from my 401(k) pot - one per year over a 10 year period for example - does each of them qualify for the same tax treatment as for a single lump sum? 2. Is there a HMRC definition of a Lump Sum? Thank you

Further question for HMRC - Does the tax treatment applicable to lump sums paid out of funds built up in overseas employer-financed retirement benefits schemes (EFRBS) prior to 6th April 2017 apply to lump sum payments from a 401(k) in this situation? - i.e . will the lump sum value accrued up to that date be free from UK tax?

HMRC - are lump sum payment or payments out of a 401k fully taxable in the UK or is a deduction available in respect of the value of the pre-6th April 2017 lump sum rights?

Hi, I can't find anything on the link you provided that addresses the questions I have asked above. Maybe the answers are there but not in a form I can understand. Would it be possible to get answers to the specific points in my post? Thanks

I am a retired UK resident taxpayer. I spent a few years working with a US employer with whom I have a 401(k) retirement savings plan. I plan to cash this in, either by a single lump payment this year or by a series of lump sum payments over a 10-year period, starting this year. I understand that under Article 17.2 of the US-UK Double Tax Treaty, these lump payments will be taxable in the US. I also understand that they will be taxable in the UK but that I will be entitled to Foreign Tax Credit Relief for the US tax paid. My question, in respect of UK tax is – will I be entitled to avail of the tax treatment applicable to lump sums paid out of funds built up in overseas employer-financed retirement benefits schemes (EFRBS) prior to 6th April 2017? If so, I had approximately 4 years’ service with the US company prior to 6th April 2017 and I paid into the 401(k) over that entire period. Would I be entitled to 100% relief on the value of my 401(k) as of 5th April 2017, with 100% being the “appropriate fraction” calculated using the formula F/R, where ‘F’ is the period of pre-6 April 2017 reckonable foreign service and ‘R’ is the period of pre-6 April 2017 reckonable service?