daisy09

Hello all, I tried a search but didn't succeed, so perhaps someone could guide me?
I am headed from USA to UK, permanently. I have a couple of IRA accounts (mutual fund and CD), not large by any means. I know I can't transfer them to an ISA, so was planning on letting them just languish here (I have dual citizenship so will file taxes in the US still).
It has occurred to me that maybe I should cash them in, and reinvest the money in the UK. I have an account there that I can get 4.5% in currently, and since they've made diddley-squat here in interest in the last three years, it might be a good time to do it.
I have no idea how much I will have to pay in penalties to do this.
Briefly there is about $30K in total, and although being employed in the UK will not earn enough to generate taxes here over and above interest (negligible) on my savings.
Can someone guide me a little?

(PS I moved my nestegg recently to enable UK house purchase and used advice I gleaned from this website. Many thanks to you all).

HKG3

daisy09

My understanding is that the 2015 budget stated that the first £1000 in interest will be tax free, please see link to BBC report below -

BBC News - Budget 2015: New £1,000 tax allowance for savers

durham_lad

If you are younger than 59.5 you will have to pay a 10% penalty, I think.

theOAP

It may be tax free in the UK, but since daisy09 is a US citizen it's not tax free in the US.

fulwood

Durham lad is correct you will pay a 10% penalty esp. if a traditional IRA.

fulwood

Daisy09 I am dual citizen but probably lot older than you (53) I have always looked at my IRA/401 as a long term investment. It may not have earned much interest in the first 3 years but over the years will compound. I think it depends how much you need the money and your age would be a factor. It is excruciating at times to see your retirement money go up and then crash down but I've learned to just roll with it even though I'm a major wart. Nun and others who are more financially savvy will have better advice.

ScotinUS

Unless its a Roth IRA you will pay tax on it as if the whole amount you withdraw is income (plus the 10% penalty if you are under 59.5).

Where to put the funds in an IRA depends on your age, risk tolerance and when you want to use the funds (how long to retirement)