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Tfr from a US pension - UK tax implications

UK tax implications

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My client worked in the US for just over 1 year a few years back, leaving in December of one year and coming back in the January 13 months later - so actually I don't think he will count as non-resident as the split year rules won't apply due to his stay being cut short and not covering a full UK tax year - unless we can claim under the tie-breaker rules as he was classed as resident in the US during the calendar year for which he was there.  He always thought he was non-resident during this time and did not declare anything on his UK return for his US earnings   During this time, he and his employer paid into a pension fund in the US.  He is currently under 55.

He is now back in the UK, and since returning, has transferred the funds from his US pension pot back to the UK (not into a UK pension pot).  Let's say the pot was worth $20k and he was charged $5k US tax on this transfer.

Am I correct in thinking this is taxable in the UK (subject to FTCR) in the year of transfer? 

I am struggling to find any useful information/the correct starting point in either Tolleys Guidance or HMRC manuals....

To add to David's comments - no tax was deducted at source, but a US return was filed for the year and c$5k was paid as a result.  He was not US resident by this stage.  I have looked at the double tax treaty but find them quite confusing...



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08th Apr 2019 18:58

The lump sum distribution is taxable in the United States. Has the client filed a US income tax return for the year it was paid. Have you - from a UK perspective - looked yet at the US/UK tax treaty? Assuming so, what does the treaty say about UK tax?

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