I am a UK citizen who worked in the USA from 1989-97, initially on a work visa, and then from 1995 as a resident alien (since abandoned via form I-407). I returned permanently to the UK in 1997, and since that time I have had no other earnings from the USA or filed a US return since 1998. From my employment period in the US I have a SEP-IRA with Schwab with around $200k value, which I would now like to cash in and transfer the lump sum here to the UK. I am 56 years old, and believe that I will have to pay the 10% penalty for early withdrawal. I have found the people at Schwab generally very helpful, and following their advice I completed a W-8BEN form. I am led to believe that they will not withhold any tax when I elect to transfer the whole amount here to the UK, although it is likely the aforementioned 10% early withdrawal penalty will apply?.
Q1. I am a little concerned with how I completed the W-8BEN form, and whether I have done this correctly?. In Part 2, line 9 I entered the 'United Kingdom' as the treaty country which was straightforward. However, for line 10 I left this section completely blank? Should I have completed line 10 to claim 'Article 17, Paragraph 1' and '0% rate of withholding', with a corresponding 'type of income' and 'additional conditions' descriptions?.
Q2. Assuming I satisfactorily make the transfer of the lump sum to the UK with no withholding (other than the 10% early withdrawal penalty), will I be liable to complete a US tax return at some stage, or can I safely assume as the W-8BEN form has been completed (currently with line 10 blank!) no further action will be required on my part?.
Q3. Can anyone offer any advice as to generally how my newly arrived lump sum would be declared and liable for tax here in the UK?.
Many thanks in advance for advice, Kevin.
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