I lived in the States for 14 years. I married and divorced a US citizen and surrendered my green card 5 years ago when I came home to the UK. I am now wanting to cash in my 401k around $96000. Will they withhold all taxes due along with the 10% penalty? Or will I have to contact the IRS to ensure all taxes are withheld? Will I need to file taxes next year in the US? If I then transfer the money over here to the UK will the money be classed as additional income and be taxed again?
Please help... any info on this would be great.

When you take the withdrawal, taxes WILL be assessed on the distribution as ordinary income. If you are UNDER the age of 59.5 at the time of the distribution, the 10% Early Withdrawal Penalty WILL apply unless you meet one of the exceptions.

I know of NO programgram that allows you to transfer the money to a U.K. pension plan, so your choices are to leave it in the 401K, roll it over into a rollover IRA, or take the distribution and pay the taxes and 10% penalty.

Since you are OVERSEAS, the custodian should withhold 30% (about $28,800), and then you would have to file a tax return for 2012 to either pay whatever added tax is due, or to claim a refund.