Lump-sum 25% tax free UK pension distributions
#1
Forum Regular
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Joined: Mar 2015
Posts: 101
Lump-sum 25% tax free UK pension distributions
I have argued in the past that a US resident could take something other than 100% (in a year) of their UK pension and get the 25% tax free element extended to US taxation via the treaty and the fact the treaty says lump-sum definition should be taken from the IRC. Lump-sum in US law is 100% of the pension while it's defined differently in UK law.
Well now the professionals are using the same argument and coming to the same conclusion. That's nice because I am 53 and need only wait a few years to take advantage of it.
“Lump-Sum” Distributions From U.K. Pensions - International Tax Blog
Well now the professionals are using the same argument and coming to the same conclusion. That's nice because I am 53 and need only wait a few years to take advantage of it.
“Lump-Sum” Distributions From U.K. Pensions - International Tax Blog
#2
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Joined: Aug 2013
Location: Athens GA
Posts: 2,134
Re: Lump-sum 25% tax free UK pension distributions
I have argued in the past that a US resident could take something other than 100% (in a year) of their UK pension and get the 25% tax free element extended to US taxation via the treaty and the fact the treaty says lump-sum definition should be taken from the IRC. Lump-sum in US law is 100% of the pension while it's defined differently in UK law.
Well now the professionals are using the same argument and coming to the same conclusion. That's nice because I am 53 and need only wait a few years to take advantage of it.
“Lump-Sum” Distributions From U.K. Pensions - International Tax Blog
Well now the professionals are using the same argument and coming to the same conclusion. That's nice because I am 53 and need only wait a few years to take advantage of it.
“Lump-Sum” Distributions From U.K. Pensions - International Tax Blog
#3
Forum Regular
Joined: Oct 2014
Posts: 110
Re: Lump-sum 25% tax free UK pension distributions
Thanks for sharing this info. i'm still slightly confused being a dual national for the past 20 years. Moved here to Florida 15 years ago and have my small personnel pension on hold/frozen. I never mention this on any tax returns that i have filed here and not because i have tried to hide or deceive just did not think i needed to. Now is the time i'm considering cashing in the policy, so could there be any problems?
#4
Re: Lump-sum 25% tax free UK pension distributions
Has that ever actually been the issue though, would the pension provider/trustee in the UK let you do it?
#5
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Joined: Oct 2014
Posts: 110
Re: Lump-sum 25% tax free UK pension distributions
Thanks Steve for your input,but i'm guessing your responding more to the original poster. After calling UK pension about my concerns it appears a third of my private 'on hold' pension will be withheld for taxes. My ongoing concern/worry is that in 15 years Stateside i've not mentioned this when filing taxes and not sure if i needed to.
#6
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Joined: Nov 2012
Posts: 902
Re: Lump-sum 25% tax free UK pension distributions
Thanks Steve for your input,but i'm guessing your responding more to the original poster. After calling UK pension about my concerns it appears a third of my private 'on hold' pension will be withheld for taxes. My ongoing concern/worry is that in 15 years Stateside i've not mentioned this when filing taxes and not sure if i needed to.