gork14
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RE: UK tax implications for 401k pension withdrawal in the US
Thanks, fred, this is helpful. And if I understand correctly the thread you linked first, the lump sum doesn't even need to be declared in the UK, i.e., doesn't have to be mentioned on the Self-Assessment return, correct? -
RE: UK tax implications for 401k pension withdrawal in the US
Thank you for sending the summary. However, this does not seem to be detailed enough to take into account provisions of Article 17 (which the summary doesn't even refer to). I would be grateful if you could comment specifically on Article 17, paragraph 2 of the UK/USA Double Tax Convention, and explain why this wouldn't apply here. -
RE: UK tax implications for 401k pension withdrawal in the US
Thank you for the reply. My question was not about IRAs or Roth IRAs, and not about regular pension income. Rather, I'm interested in a one-off (lump-sum) liquidation of a 401(k) plan. This *will* be taxable in the US (and it will attract a 10% penalty). My question is whether or not this will *also* be taxable in the UK. According to the cited Article, it shouldn't be. That is, unless HMRC applies the Savings Clause. I cannot find official guidance on whether or not HMRC does that. Thanks -
UK tax implications for 401k pension withdrawal in the US
Hi, I am a UK tax resident, under the pension age. I have a 401k pension plan in the US, which I would like to liquidate, i.e., withdraw in its entirety as a lump sum. In the US this will be subject to income tax (plus an early withdrawal penalty). According to the 'UK/USA Double Taxation Convention' (Article 17, Paragraph 2), this will NOT be subject to any UK tax. Is this correct? Do I still have to mention this on a UK tax return? If so, where? If all the above is correct, then there is still the 'Saving Clause', according to which HMRC could in principle ignore the above-mentioned article and impose income tax anyway. Is this being done in practice? Thank you