UK tax / US tax


R

ranga.desi

Hi
I have been searching online for a while and really hope this group
will help me find the answer. I was working in the US at the beginning
of this year (2006) on a work permit( H1 B visa) . I lived there for
exactly 182 days and left the US on July 1st to move to the UK where I
started work on July 17th. I am on a spouse settlement visa in the UK
which made me eligible to work. I am planning to move all my bank
balances, 401K retirement money etc in the USA to UK ( I need the
money!) . The 401K customer service rep told me that I could fill in a
form by which I would not be taxed the 30% on early withdrawal or the
10% penalty by virtue of me living in a foregin country ( foreign
beneficiary).

Now, my questions is - does it mean I can get the 401K money without
paying tax at all ? Will I have to pay tax on this transaction in the
UK ? If so, am I better off being taxed/penalized in the US instead of
being taxed in the UK ? Also, I am not certain if I am considered a UK
resident and hence, will be a non-resident alien by US tax terms , or
if I am still a US resident alien by virtue of the substantial presence
test ( which I believe is just 183 days counting days in 2006 + 1/3rd
from 2005 and 1/6th from 2004). I hope I am not making wrong
assumptions.

I will be so happy with a clarification to my questions .

Regards,
Ranga
 
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D

dtren

Hi
I have been searching online for a while and really hope this group
will help me find the answer. I was working in the US at the beginning
of this year (2006) on a work permit( H1 B visa) . I lived there for
exactly 182 days and left the US on July 1st to move to the UK where I
started work on July 17th. I am on a spouse settlement visa in the UK
which made me eligible to work. I am planning to move all my bank
balances, 401K retirement money etc in the USA to UK ( I need the
money!) . The 401K customer service rep told me that I could fill in a
form by which I would not be taxed the 30% on early withdrawal or the
10% penalty by virtue of me living in a foregin country ( foreign
beneficiary).

Now, my questions is - does it mean I can get the 401K money without
paying tax at all ? Will I have to pay tax on this transaction in the
UK ? If so, am I better off being taxed/penalized in the US instead of
being taxed in the UK ? Also, I am not certain if I am considered a UK
resident and hence, will be a non-resident alien by US tax terms , or
if I am still a US resident alien by virtue of the substantial presence
test ( which I believe is just 183 days counting days in 2006 + 1/3rd
from 2005 and 1/6th from 2004). I hope I am not making wrong
assumptions.

I will be so happy with a clarification to my questions .

Regards,
Ranga
Can't comment on the USA end.

You will not be taxed in the UK just for bringing your money here.

Once it's here, though, and invested, it will become liable to UK
taxation - eg on the interest or dividends or whatever
 
S

scopy

Hi
I have been searching online for a while and really hope this group
will help me find the answer. I was working in the US at the beginning
of this year (2006) on a work permit( H1 B visa) . I lived there for
exactly 182 days and left the US on July 1st to move to the UK where I
started work on July 17th. I am on a spouse settlement visa in the UK
which made me eligible to work. I am planning to move all my bank
balances, 401K retirement money etc in the USA to UK ( I need the
money!) . The 401K customer service rep told me that I could fill in a
form by which I would not be taxed the 30% on early withdrawal or the
10% penalty by virtue of me living in a foregin country ( foreign
beneficiary).

Now, my questions is - does it mean I can get the 401K money without
paying tax at all ? Will I have to pay tax on this transaction in the
UK ? If so, am I better off being taxed/penalized in the US instead of
being taxed in the UK ? Also, I am not certain if I am considered a UK
resident and hence, will be a non-resident alien by US tax terms , or
if I am still a US resident alien by virtue of the substantial presence
test ( which I believe is just 183 days counting days in 2006 + 1/3rd
from 2005 and 1/6th from 2004). I hope I am not making wrong
assumptions.

I will be so happy with a clarification to my questions .

Regards,
Ranga
Hi Ranga

I would speak to citibank. The reason is that they have banks both in
the usa and the uk. Depending on the amount of money involved, you may
get them to advise you of the best course of action to take. AS you
want to be a customer.

( In the Uk we dont know what 401k service is.) I would get the form
the 401K customer service rep told you about and get a second opinion
form another source e.g the IRS (anomalously of course).

You can get both the UK and USA tax rares at www.scopulus.co.uk.

Hope this helps
Scop
 
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S

scopy

scopy said:
Hi Ranga

I would speak to citibank. The reason is that they have banks both in
the usa and the uk. Depending on the amount of money involved, you may
get them to advise you of the best course of action to take. AS you
want to be a customer.

( In the Uk we dont know what 401k service is.) I would get the form
the 401K customer service rep told you about and get a second opinion
form another source e.g the IRS (anomalously of course).

You can get both the UK and USA tax rares at www.scopulus.co.uk.

Hope this helps
Scop
tax rates. sorry typo.
 

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