Thanks to confirm do I owe tax on the pension amount? I’ve been sent a letter from
HMRC with the following options:
1. I need to bring my tax affairs up to date. I will declare all my outstanding UK tax using H M R C ' s WorldwideDisclosureFacility.
2. I have not declared my overseas income and/or gains as they are covered by personal
allowances or reliefs.
3.I have not declared my overseas income and/or gains as they are not liable to UK tax
Please can you help me proceed?
I am a UK citizen and recently received a notification from HMRC asking me to review my foreign income.
I lived and worked in the US where I contributed to a 401k account. When I returned to the UK in 2020 I withdrew my full balance from the US pension and paid US tax. I did not declare this as income to HMRC on my self assessment as I believe it was not taxable based on Article 17 Statement 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.
My question is should I have declared this and is it subject to tax in the UK?