Tomsquance[at]hotmail.com (Tom) wrote:

- quote -

The new UK-US treaty states that the country of residence
will tax your pension income. It also states that any
amount that would have been tax-free if you remained a
resident in the country where the pension was established is
also tax-free in the country where you reside. This clause
is there to protect the tax-free nature of Roth IRAs and the
tax-free nature of any after-tax contribution to a pension.
However, unlike the old treaty, the new treaty says that a
lump-sum payment will be taxed by the country in which the
pension was established.

In other words, if you return to the UK and give up your
green card, the UK will tax your pension distributions from
the US 401(k). If you opt to receive a lump-sum distribution
from the 401(k), then the US will withhold taxes from that
payment.

Use the above info to draw your own conclusions.

Alan
http://taxtopics.net

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I am a UK citizen, have applied for AOS and currently
awaiting my Green Card.

My wife and I intend to continue working in the US for at
least the next 2 years before returning to the UK.

I have no private pension fund from the UK.

My employers have offered me a 401k program.

Will I be able to easily transfer the gross amount accrued
from the 401k into a UK pension fund?
Or,
Would it be worth me opting out of the 401k program and
paying into a private pension fund in the UK?

Thanks

Tom

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