Withdrawing a US pension while a UK tax resident

Many British expatriates have worked in the US, accruing benefits on a range of pension funds – including 401(k)'s, IRA's, 403(b)'s and many occupational schemes. When it comes to withdrawing those pension funds, the default position is that a UK tax resident will be taxable at the individuals marginal rate of income tax on those funds.

However, unless the pension fund balances are very small, many individuals will benefit from seeking tax advice prior to making any withdrawal. They may be able to take a position under the US/UK double tax agreement to the effect that the withdrawal is only taxable in the US. Any withdrawal in the US would normally be subject to US marginal tax rates, but this may be more beneficial than the UK position and/or there may be other ways of reducing the effective tax rate.

As you will appreciate, this is quite a complex area, and specific tax advice is required. If you would like to arrange tax advice, please complete the Inquiry form and we will arrange for an adviser to contact you accordingly. No cost or commitment attaches to any initial discussion and you would be provided with a fee quotation in advance of any advice or services being provided.