fiddle

Hello, I would appreciate anybody's help on the subject of paying tax in the UK and USA on personal/private pensions. I have just arranged for two personal pension plans to be paid as a lump sum. I am a UK citizen and USA permanent resident. I have been in the USA since 2002. I do not pay any UK taxes. The British HMRC told me that these lump sums remain taxable in the UK, no exemption is available and they are taxable in full. I thought that I was able to reclaim the tax that had been stopped by the Insurance companies, but apparently not. I will be checking with my USA accountant on this, but does anybody know if I have to pay USA taxes on these lump sums, bearing in mind that I have already paid tax in the UK. I am aware of the double taxation treaty but I believe I did not fully understand the implications of taking your UK pension as a lump sum, as opposed to buying an annuity. I would appreciate anybody's advice on this. Many thanks indeed.

Cook_County

You will have already been reporting these each year on your FBAR; and - if required Form 8938. A lump sum is only UK taxable, but at graduated rates. If the PAYE is too high you can file a UK return and get a refund. If you elect to claim the treaty in the US there is no US tax (at the Federal level at least).

fiddle

Many thanks indeed 'Cook County.' Your response is very much appreciated.