Dave
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RE: URGENT: UK citizen in the UK has an IRA (not a ROTH). Are withdrawals taxable in the UK?
Hello, Thank you for taking the time to respond, but I am confused. You say 1) "An Individual Retirement Account (IRA) considered a savings account ", and then 2) "and withdrawls are treated as income in the UK and taxed as interest." Withdrawals from savings accounts are not normally taxable, only the interest, so if an IRA is considered by the HMRC to be a savings account, are you really saying that (UNLIKE!) a savings account, all of a withdrawal is taxable, even if that withdrawal is a lump sum? Thank you -
URGENT: UK citizen in the UK has an IRA (not a ROTH). Are withdrawals taxable in the UK?
Hi, I have a US traditional IRA worth over £100,000. It's similar to a SIPP and withdrawals (called distributions) are treated as income in the US and subject to income tax. I want to close the IRA and bring the £100,000 to the UK. If I use the Tax Treaty I think there would be no tax to pay, but is that £100000 fully taxable in the UK - namely is it treated as income and thus most of it will be taxed at the higher rate of 40%? Or, if I don't use the tax treaty and pay US tax at around 20%, do HMRC still want to tax it? Any help on this urgent matter would be appreciated. -
RE: UK citizen in the UK wants to close out USA Traditional IRA and bring monies home to the UK.
Hi HMRC Admin 32, Thank you for your reply but I'm not sure it it applies to my case. My IRA only holds stocks/shares and therefore gains in value due to dividends and share price increases not from interest. And I intend to withdraw the entire amount and close the IRA. Thus it is similar to cashing in the US equivalent of a SIPP, and once cashed in transferring ALL the cash ($150k) to the UK. My US CPA tells me that if I DO NOT use the US/UK tax treaty, I'll pay US tax on the withdrawal, but no UK tax when I transfer it to a UK bank account. This would reduce my overall tax % as my US tax burden would be 20% whereas my UK tax burden would be around 40%. I would just like confirmation that my CPA's is correct in HMRC having no interest in monies that have already been taxed by the US? Thank you. -
UK citizen in the UK wants to close out USA Traditional IRA and bring monies home to the UK.
I worked 10 years in the USA but returned home 12 years ago. I have a Traditional (as opposed to Roth) IRA that I need to terminate and bring the monies home. An accountant in the US tells me that I can opt NOT to utilise the UK/US tax treaty when I withdraw my monies. He says I will initially get 30% withheld by the IRS, BUT (given the amount I wish to withdraw) I'll eventually get 10% back, making the actual tax 20%. He also says that when I transfer the monies to the UK, HMRC will have no interest in it, and no further tax will be due. Is this advice correct? I ask, because (according to him) if I were to use the tax treaty, I will end up not paying US tax, but I WILL end up paying 40% in the UK as it will take me into the higher tax threshold. Thanks for any help people can give me.