Orchard Bill

As a UK resident I was in the USA for 5 years and contributed to a good company pension. Now I have been given various annuity options plus a one of lump sum option. What are my options regarding minimizing tax particularly in the USA. Can I transfer into a UK ISA for example.
Thanks for your help. Orchard Bill

lansbury

You might do better posting this in the USA forum. Several there, who probably don't read this forum I only saw it by chance, will be able to give advice. Or goto uk-yankee.com.

BEVS

As there was no other response in 3 days, I have moved this into the USA forum as suggested.

Thanks

Pulaski

Just to clarify the detials, you are a UK citizen (only), not a permanent resident (of the US), and resident in the UK?

And this "company pension" you contributed to sounds like it was actually a US 401k scheme? People in the US don't usually contribute to a "company pension".

nun

Well you certainly can't transfer the money to and ISA or a UK pension account and maintain tax deferral.

When you are deciding whether to take an annuity or a lump sum you first have to decide which is the best offer for you. For that you'll have to make some assumptions about longevity.

As far as tax goes, with the annuity there won't be any US or UK tax implications until you take the income. Assuming you are not a US citizen and you live in the UK then you'd have to pay UK tax on the annuity income.

If you take the lump sum you have two options: roll it over into a US IRA, 401k, 403b etc (if you have one of those) and then it can grow tax free until you take income which will be taxed just like annuity income; or you could take the lump sum as cash. In that case you'd only have to pay US tax on it, however, as a non-resident you don't get the same exemptions and deductions as a resident.

Neillc37

There is a freshly minted flowchart outlining how distributions are taxed on the international tax blog:

International Tax Blog: Flowchart - Taxation of Pension Distributions Under UK - US Income Tax Treaty

This pretty much matches what has been said here before. I asked the authors about the lump-sum in the US vs the lump-sum in the UK question.