USA and Individual Retirement Accounts

USA and Individual Retirement Accounts

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I have a resident (and domicile) client who receives withdrawals from an American Individual Retirement Account.

The client has received conflicting advice as to firstly whether or not taxable in the UK and secondly what if any double tax relief is available. I have been searching online for a publication or something that would help me provide an answer but I seem to be hitting a brick wall! Any suggestions ?
Nigel Fisher

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By k40911
27th Apr 2008 18:49

The answer is a tad complex
HMRC take the view that IRAs are normally bare trusts but effectively converted into pension schemes under Article 17 of the US/UK treaty.

This has th effect that withhdrawals in excess of basis are taxable in the UK only.

However HMRC have not yet addressed the unauthorised payment regime would could be read as applicable.

There would be no DTR because the income would be resourced as foreign for US purposes.

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