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Readers’ forum: US pension

15 December 2020
Issue: 4773 / Categories: Forum & Feedback
Tax on distributions from overseas pension scheme.

My client is a 74-year old UK resident British citizen who worked in the US for many years before retiring before 6 April 2017.

To avoid penalties in the US he must take required minimum distributions from his 401k retirement scheme even though he does not need the money.

My question is whether these distributions are regarded as lump sums for pension scheme purposes so that they qualify for the 25% reduction for UK tax purposes?

Chapter 2 of Pension tax for overseas pensions ( states that from 6 April 2017 lump sums paid by non-UK pension schemes to UK residents will be taxable regardless of the type of pension scheme paying the lump sum. Further if the non-UK scheme is registered any lump sum will be taxable in the same way as lump sums from a UK-based registered pension scheme.

The required...

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