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TaxRobin, Tax Consultant
Category: Tax
Satisfied Customers: 17191
Experience:  International tax
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I have to do both US and UK taxes as I am resident in the UK

Customer Question

I have to do both US and UK taxes as I am resident in the UK but a US citizen. I have withdrawn money from a US traditional IRA and paid a small amount of US tax on it - as I am not resident in the US. Do I need to report it on my UK taxes? And can I get foreign tax credit which is equal to the amount of tax I paid to the US government?
Submitted: 1 year ago.
Category: Tax
Expert:  TaxRobin replied 1 year ago.


The US IRA is treated as a pension for UK tax purposes.

You have to pay tax on pensions if you’re resident, or were resident in any of the 5 previous tax years.

You’ll usually only pay tax on 90% of your foreign pension payments (10% is exempt from tax).

You can usually claim Foreign Tax Credit Relief when you report your overseas income in your tax return.

The US tax rates are generally lower than the UK so you may receive a full relief on the UK tax of the pension.