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IRA distribution

Answer
Ian Colloff
Posted Sat, 21 Dec 2024 11:33:08 GMT by Ian Colloff
As a UK citizen living in the UK does an IRA count as a pension pot in the UK?
Answer
HMRC Admin 17 Response
Posted Wed, 08 Jan 2025 09:07:02 GMT by HMRC Admin 17 Response

Hi ,
 
Payments made by the individual into an IRA, are made after tax relief is given to the individual by the employer.  Payments from this pension are taxable in the USA. 

HMRC do not recognise IRA schemes as pensions, so for UK residents, they are taxed as income under the interest and declared as foreign interest on a tax return (SA106).   

There is no US taxation if the pension is subject and liable to UK tax. If US tax is withheld, then the individual,  should seek a refund of this tax
(file a form 1040NR). 

HMRC will not give a credit for this tax against any UK tax charged on this income.  

 Payments made into a Roth IRA are made before tax relief is given. 

As a result, payments from this account are not taxable in the USA. 

HMRC recognises this account as a pension scheme and as it is not taxable in the USA, it is not taxable in the UK either .

Thank you .



 

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