Pension Beneficiary Distributions

[milleph]

Hi,

My father passed away in 2018 and I and my two daughters (both aged 20) received beneficiary distributions in Jan 2019 from his pension fund with Liverpool Victoria. Although I am British (we all have dual citizenship) I have lived in the USA for 26 years. My daughters were born in the USA. One is at college in the US and the other at college in the UK and neither works. We have just received the P45's from Liverpool Victoria.

Because my father was over 75, income tax was deducted on a 'week 1 month 1' basis from each of the three distributions which amounted to a 41.3% deduction. In the USA I don't believe such distributions are taxable below a limit that is well above the numbers involved here.

1. For me and my US domiciled daughter, I assume we are entitled to a refund from HMRC?
2. For my UK domiciled daughter attending college, will this be treated at income tax in the UK? If so she should still get a refund as she has no other income.

Appreciate any insights or direction you can offer.

Regards,

Phil

[DavidTreitel]

From a US perspective your father's estate was a specified foreign financial asset, reportable to the IRS on Form 8938 while it was in administration. Was this filed? Form 3520 is required if the inheritance was over $100,000.

The pension income is all reportable in the US because you are all US citizens. To recover UK tax you will each need to file UK self-assessment tax returns.