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Pension at 55 - Removing Full Pot

Pension at 55 - Removing Full Pot

Old Aug 28th 2017, 6:18 pm
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Default Pension at 55 - Removing Full Pot

Hello All,

Forgive me if this has been covered but I have been reading so much about this and not really getting the full picture and my head is spinning!

My question is really fairly simplistic.

I have a fund that has been doing nothing for years and it makes sense to draw it out when I turn 55 next month.

As a UK citizen who is green card resident in the UK, what level of taxation is applied by the Inland Revenue in the UK. If it helps, the fund is no more than about 31K GBP. I realise their are other implications, but as a starting point, I would like to establish the UK taxation status.

Thank you for reading.
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Old Aug 28th 2017, 6:27 pm
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Default Re: Pension at 55 - Removing Full Pot

Originally Posted by MickM62 View Post
.... As a UK citizen who is green card resident in the UK, .....
Which country do you live in? (Is that a typo I quoted?)

Unless it is a government pension (resulting from employment by the government, not a state pension), a pension is taxed only by the country where you are living.

Last edited by Pulaski; Aug 28th 2017 at 6:36 pm.
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Old Aug 28th 2017, 6:32 pm
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Default Re: Pension at 55 - Removing Full Pot

Originally Posted by Pulaski View Post
Which country do you live in? (Is that a typo I quoted?)

Unless it is a government pension, a pension is taxed only by the country where you are living.
Yes I am an idiot, one generally does not need a green card as a UK citizen in the UK, I meant I am in the US.

The fund is Defined contribution (money purchase).

Hope this helps and thank you.
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Old Aug 29th 2017, 7:44 am
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Default Re: Pension at 55 - Removing Full Pot

If you withdraw it all as a lump sum it will only be taxed in the UK. Have you remembered to report it on your FBAR & 8938 every year?
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Old Aug 29th 2017, 11:19 am
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Default Re: Pension at 55 - Removing Full Pot

If you withdraw it all as a lump sum it will only be taxed in the UK.
I think I saw a post a couple of weeks ago about where US pensions would be taxed for a UK citizen/resident.
It said that a lump sum payment would be taxed in the US?
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Old Aug 29th 2017, 12:00 pm
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Default Re: Pension at 55 - Removing Full Pot

Originally Posted by formfill1 View Post
I think I saw a post a couple of weeks ago about where US pensions would be taxed for a UK citizen/resident.
It said that a lump sum payment would be taxed in the US?
Well, the treaty is elective; so you could pay tax in both countries if you really wanted...
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Old Aug 29th 2017, 12:01 pm
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Default Re: Pension at 55 - Removing Full Pot

Originally Posted by Cook_County View Post
If you withdraw it all as a lump sum it will only be taxed in the UK. Have you remembered to report it on your FBAR & 8938 every year?
The short answer is no.

If I am honest, I think the last contribution in was in 1996 and I did not even realise the plan was around until by chance I got forwarded some mail a few weeks back.

Now I am extremely worried.
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Old Aug 29th 2017, 12:18 pm
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Default Re: Pension at 55 - Removing Full Pot

Originally Posted by MickM62 View Post
.... Now I am extremely worried.
There's no need to be. Lots of people have pension savings they forgot about or were unaware of.
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Old Aug 29th 2017, 12:22 pm
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Default Re: Pension at 55 - Removing Full Pot

https://www.irs.gov/individuals/inte...ion-procedures


https://www.irs.gov/individuals/inte...ion-procedures
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Old Aug 29th 2017, 12:30 pm
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Default Re: Pension at 55 - Removing Full Pot

Thanks Guys!!!
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Old Aug 29th 2017, 2:34 pm
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Default Re: Pension at 55 - Removing Full Pot

Originally Posted by formfill1 View Post
I think I saw a post a couple of weeks ago about where US pensions would be taxed for a UK citizen/resident.
I think this is correct however I think his situation is that he is a UK citizen living in the USA on a Green Card and has a UK pension that he wants to cash in.
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Old Aug 29th 2017, 2:44 pm
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Default Re: Pension at 55 - Removing Full Pot

Based on the information you have provided. You are a U.K. resident taxpayer who is resident in the U.K. for tax purposes but have a green card.

You do not become a resident alien in the U.S. until the first day you reside in the U.S. so as a U.K. resident taxpayer you can claim the PCLS and take the full pension pot after the 25% tax free cash at your marginal rate of income tax in the U.K.
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Old Aug 29th 2017, 2:48 pm
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Default Re: Pension at 55 - Removing Full Pot

Originally Posted by Dominic0012 View Post
Based on the information you have provided. You are a U.K. resident taxpayer who is resident in the U.K. for tax purposes but have a green card.

You do not become a resident alien in the U.S. until the first day you reside in the U.S. so as a U.K. resident taxpayer you can claim the PCLS and take the full pension pot after the 25% tax free cash at your marginal rate of income tax in the U.K.
He updated his position later in the thread.

Originally Posted by MickM62 View Post
Yes I am an idiot, one generally does not need a green card as a UK citizen in the UK, I meant I am in the US.

The fund is Defined contribution (money purchase).

Hope this helps and thank you.
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Old Aug 30th 2017, 3:15 pm
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Default Re: Pension at 55 - Removing Full Pot

Originally Posted by durham_lad View Post
He updated his position later in the thread.
Yes exactly, apologies for the confusing typo.

I think I have this all sorted now.
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