401k

I left the US in 2003 and left my 401k behind.

It wasnt rolled into an IRA (I foolishly thought i could do this later!)

Now I want to access the money and bring it back to the UK but cant find how to roll it into an IRA as I am not resident in the USA i dont seem to meet the conditions of transfer.

Dos this mean I am just going to have to suck up the 20% tax and 10% penalty or is there a way round it?

I am a UK citizen.

Thanks

Jon

dunroving

Why don't you want to leave it in the US? It could be a lot cheaper to leave it there and draw down in retirement than move it to the UK.

Mallory

Are you older than 59-1/2?

401k

Because I need the money now!

401k

Only 47 years young. 12-1/2 years to go!

Michael

Even if you rolled it in to an IRA, the rules are the same as the 401K for withdrawal unless it was rolled into a Roth IRA but then tax is due immediately but no penalty (only recently allowed). Why do you think there is a 20% tax? Tax is based on income.

Bluegrass Lass

What's your objective here? Do you want the cash in your pocket? Or are you just wanting to transfer the funds into an IRA to continue earning value until you retire?

If you want the cash, then yes you will have to pay tax and penalty. AFAIK, there is no way around that.

Michael

There are a few loopholes such as you can withdraw about $10,000 if you are buying your first home without paying penalities.

Bluegrass Lass

Would that apply if the person is resident in the UK? I wouldn't think so, but I don't know full details.

Michael

I don't know and I looked it up and this only applies to IRA's so I was wrong but I think he could transfer it to an IRA and withdraw $10,000 if that is allowed for non US residents.

nun

If you want the 401k money now you will have to pay the 10% early withdrawal penalty unless you need the money for one of the exceptions, like $10k to buy a home. That would also be the case if you had rolled the 401k money into an IRA. You can get at the money penalty free by doing a 72t where you take it out in equal payments based on your mortality, sort of like an annuity, but you could not get at all the money until you were 59.5.

Any money that you do withdraw from your 401k will not be subject to US tax if you are a NRA and a UK resident. You need to make sure that your 401k provider is aware that the 30% withholding tax usually imposed on distributions made to NRAs is not taken out. The 10% or 20% withholding amounts are only for US citizens and US residents. To do this you need to invoke the US/UK tax treaty. You will be fully taxable on the money as income in the UK and will have to do a UK self assessment.

401k

Thank you for an excellent reply. - As i am self employed i would just include it as part of my SA. - This sounds like a plan to me!

Now just to explain it to my plan administrators and persuade them not to deduct the penalties!! - Wish me luck!

nun

FYI you still pay the 10% early withdrawal penalty.

nun

..........unless you do the 72t.

dunroving

OK ...