delta1066
Apr 23, 2007, 07:05 AM
I have approx $210,000 in a US company 401k scheme. I am almost 72 years old and a UK National and resident. I previously worked in the USA under a Green Card.
I retired in 1996 and surrendered my Green Card and now live in the UK on a permenent basis. I am married and my wife is almost 67 years old.
I am now receiving an annual cumpulsary distribution of 1/27 of the total 401k investment. This I can elect to have paid to me with no withholding and as I am a uk resident would not be subject to US tax but will be suject to UK tax as Income.
This would be fine if I had only myself to think of but I understand that when I die, by the rules of my company's 401k the remaining balance of my 401 account will be paid in full to my widow.
My questions
1 Will this be treated as income for her in that year.
2 Is there a way to avoid this Tax
3 Is there a way I could liquidate this account say over a 4 year period and minimise the Tax under the existing US/UK Treaty
4 What would the level of US tax be if I were to withdraw $50,000 per year under the treaty. (I am currently receiving a US company pension and US Social Security Pension currently not taxable in the US )
Any help would be greatly appreciated, professional UK/USA expertise seems mighty scarce over here
I retired in 1996 and surrendered my Green Card and now live in the UK on a permenent basis. I am married and my wife is almost 67 years old.
I am now receiving an annual cumpulsary distribution of 1/27 of the total 401k investment. This I can elect to have paid to me with no withholding and as I am a uk resident would not be subject to US tax but will be suject to UK tax as Income.
This would be fine if I had only myself to think of but I understand that when I die, by the rules of my company's 401k the remaining balance of my 401 account will be paid in full to my widow.
My questions
1 Will this be treated as income for her in that year.
2 Is there a way to avoid this Tax
3 Is there a way I could liquidate this account say over a 4 year period and minimise the Tax under the existing US/UK Treaty
4 What would the level of US tax be if I were to withdraw $50,000 per year under the treaty. (I am currently receiving a US company pension and US Social Security Pension currently not taxable in the US )
Any help would be greatly appreciated, professional UK/USA expertise seems mighty scarce over here