zulupamela

I left the US 20 years ago after worked for an American Bank for 10 years. I have an IRA account and want to start to withdraw money from it. I know that there is a Tax treaty between the US and UK but want to know the best way to withdraw.

I currently work part time and earn £15,000 pa. I figure that the best thing would be to start to sell my investments and only withdraw enough each year to keep me out of the 40% tax bracket?

I have a cash management account with Bank of America that has a VISA card. Is the best way to access the funds to sell the amount of investments I want each year, have the proceeds paid into my CMA account and then get the cash out by using my VISA card? Not sure how else I can get the money transferred to the UK. Any advice would be greatly appreciated.

Pulaski

If you're talking about using your VISA card as a debit or ATM card then that is likely to be a fairly expensive way to access your funds.

You can use a remitting service such as xe.com, xoom.com or a myriad of others (not all are licenced to operate in the US, so that might limit your choice - search BE threads for <xe.com> as it features in most of the threads related to remitting services) to transfer your funds cheaply and at a good exchange rate to your account in the UK. Choose a way to debit your account in the US and credit your account in the UK that does NOT involve wires if you have a choice (on the remitter's web site), so as to avoid wire fees.

zulupamela

Many thanks for your help. Will look at the remitting services you suggested.

nun

You should file a W-8BEN with your IRA administrator and make sure there is no US tax withheld. If that is done correctly you won't have to file any other US tax forms. You will obviously have to put your IRA withdrawals down as pension income on your UK self assessment.

Probably the easiest way to do the withdrawals is to sell whatever funds you have in the IRA, or take some dividends, and put them into your bank account and then do a wire transfer to your UK bank. Or use one of the services like xoom.

Pulaski

A wire, counting fees at both ends, will probably cost around $50, and unless you're transferring $50,000+, a bank will give you a poor exchange rate.

zulupamela

Your help and advice is very much appreciated.