Around 240,000 Americans live in the UK. Most have a 401(k), an IRA or both, and those accounts need managing under two of the world's most complicated overlapping tax systems.
The US-UK tax treaty gives important protection, but how it applies to Roth IRAs, ISAs and workplace pensions is nuanced and often misunderstood.
We specialise in exactly this. We advise through an SEC-registered US firm, so we can manage your US retirement accounts directly. Where the UK side needs local expertise, we work alongside UK tax advisers and planners.
We manage rollovers, investments, required minimum distributions and Roth conversions from the US.
The UK doesn't automatically treat a Roth IRA as tax-free. The treaty can help, but the details matter, so we advise before any conversion.
We help you understand your entitlement and when to claim it, working with your tax adviser on how it's taxed while you live in the UK.
UK bank and investment accounts create US reporting obligations. We build them into your plan and refer you to US tax specialists for the filings.
Hypothetical example: Robert, 58, living in London. Robert has $400,000 across two old401(k)s and an IRA. He plans to draw 4% a year, $16,000, while he's still in the UK, thenretire to Florida at 65.
That's a swing of £2,666 a year, about 20%, with no change to his investments. And if the IRA pays him at a UK address, federal tax is withheld at source: typically 10% on IRA withdrawals and 20% on payments straight out of a 401(k). He may get some or all of it back, but he has to wait for it.
What Robert did: he consolidated the three accounts into one IRA with a US custodian that accepts UK residents and invested in US-domiciled funds. He also timed his currency conversions instead of taking whatever rate the payout day gave him. As his return date gets closer, his plan shifts towards income he can rely on once he's back in the US.
Hypothetical illustration for educational purposes only. Robert is not a real client. Exchange rates are examples, not forecasts. Withholding and tax outcomes depend on individual circumstances, residence and applicable treaties.
Yes. You can leave it in your former employer's plan or roll it into a US IRA, but you can't transfer it into a UK pension. We can manage your IRA from the US while you live in the UK.
Not automatically. The treaty has specific provisions for Roth IRAs held by UK residents, but how they apply depends on your circumstances. We advise clients on this regularly.
