kph100

Currently going through IR1 visa route.
I will be taking my pension upon leaving UK job and moving to USA with intention then to get job in USA.

My work pension is a defined benefits scheme with option to take tax free lump sum upon retirement and reduced annual pension.

I was going to wait for Visa agreement, enter US to activate visa and then return to UK for few months to give notice and retire and arrange pension payment etc.
However now thinking that may affect tax free lump sum payment as I assume i am US tax payer from the date Visa activated and guess have to pay tax on the lump sum that will be paid on retirement in UK ??

Is this correct, I really dont want to give in my notice until I am assured I have visa stamped and therefore greencard on border entry in USA.

peoples views please.

Wirksworth

Hi, I was in a similar situation and took advice re the IRS Tax treatment of a 25% Lump Sum payment. The initial advice from a large US firm was the UK- US Tax treat meant that the 25% lump sum was not taxable in the US once one was a US Resident but having read this forum it appears such less black and white and it seems the saving article overrides the pension clause. I contacted the firm who I took advice from and they reversed their previous position such that it is taxable once one is a US resident. My understanding is you become a resident for Tax on the first day you enter the country once residency is triggered less the potential to exclude the first 10 days in the USA subject to some criteria which revolve around you being able to prove you had stronger ties to the UK in the excluded period ( which it looks to me like you would have) . This may mean you can probably take the tax free lump sum before you become a US resident but I would take further advice and or what see others on the forum can help you further.

lansbury