401k - what should I do with it?
Sep 27th 2022, 3:06 pm
#17
Forum Regular
Joined: Jan 2011
Location: England
Posts: 118
Re: 401k - what should I do with it?
You need to check with your brokerage about their policies regarding overseas customers. We have had more than one member report that their 401k provider announced that they needed to move their funds, and if they didn’t already have a US brokerage already open that they could roll their 401k into that would mean receiving the funds as a check or cash transfer including all the taxes that would entail.
If you have mutual funds inside a retirement account like a 401k or IRA then no problems at all. If you have mutual funds in taxable accounts then HMRC will treat all dividends and capital gain distributions as regular income so you lose those much lower tax advantages. If it is a fund such as an ETF that “reports into” HMRC then stock fund dividends and capital gains get the much lower tax rates of those funds.
https://www.gov.uk/government/public...eporting-funds
If you have mutual funds inside a retirement account like a 401k or IRA then no problems at all. If you have mutual funds in taxable accounts then HMRC will treat all dividends and capital gain distributions as regular income so you lose those much lower tax advantages. If it is a fund such as an ETF that “reports into” HMRC then stock fund dividends and capital gains get the much lower tax rates of those funds.
https://www.gov.uk/government/public...eporting-funds
Sep 27th 2022, 3:14 pm
#18
BE Forum Addict
Joined: Aug 2013
Location: Eee Bah Gum
Posts: 4,131
Re: 401k - what should I do with it?
No, you can still actively trade by buying and selling within the IRA. For example, I let all the dividends and capital gain distributions pay into a money-market within the IRA then in January or February I will make a distribution to my bank of the money I need for the year and then re-invest the rest into the funds I want to maintain my overall target asset allocation.
ETA
This is with Vanguard, but I assume other brokerages have similar policies
