Line 10 W8-BEN

[Marksims]

I am a UK citizen residing in the UK with a US IRA. I wish to take advantage of the UK/US tax treaty and have submitted a W8-BEN. It has been rejected because line 10 was not completed. Can anyone advise on what this should read?

[pawncob]

chrome-extension://oemmndcbldboiebfnladdacbdfmadadm/https://www.irs.gov/pub/irs-pdf/iw8.pdf

Line 10 (Special rates and conditions). If the beneficial owner is required to explain the additional conditions in the treaty that it meets to be eligible for the rate of withholding on line 10, you may accept a brief explanation for this purpose. You may accept a treaty claim without this explanation under an interest or dividends (other than dividends subject to a preferential rate based on ownership) article of a treaty or other income article, unless such article requires additional representations.

[DavidTreitel]

It is common for US IRA providers to withhold and not accept W-8BENs. I'd suggest accepting the withholding tax. Assuming you are taking a lump sum distribution you will inevitably owe some tax to the IRS once the 2020 US tax return is filed next year, so there is no harm in having an amount withheld.

[Marksims]

Thanks. I have checked with my IRA providers and they say that they will accept the form but line 10 is filled out incorrectly. I am looking to take out a small annual distribution but not keen on restarting filling out US tax forms but declaring on my UK tax form

[DavidTreitel]

Agreed; as you will be taking periodic distributions the income will be exempt from US tax. Ask the IRA provider what they claim is wrong with the W-8BEN. Escalate the question until they actually tell you the correct answer.

[Marksims]

In my case the answer appears to be Article and paragraph 12 (1) and 0% . Thanks