This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.


Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet


Posts: 1
Joined: Thu Jul 25, 2019 12:18 pm


Postby dahlia » Thu Jul 25, 2019 12:32 pm

I am a UK resident, US citizen. I inherited IRAs from my father last year. One normal and one Roth. They were rolled into Inherited IRA accounts in my name (BDAs). They are not earning any money so I want to bring the money to the UK. My accountant says they would be taxed by the UK first and also told me that they would be subject to a 10% early withdrawal penalty. I think I have confirmed he was incorrect about the penalty as they are inherited. Can anyone double confirm that for me?

But I am also not sure he's right about the UK taxing it first if I take the money as lump sums. Can anyone shed light on this? What constitutes a lump sum? I would have to take the money in several tranches over the next few years so I don't get pushed into the highest tax bracket with my other income, so want to understand if it still works if I take a third now, a third in a year and a third in two years. This is the HMRC page that seems to confirm that the US taxes it instead of the UK:

And is it correct that the money in the Roth IRA doesn't get taxed at all?

Thank you in advance for any feedback!!

Posts: 224
Joined: Thu Aug 16, 2012 4:31 pm


Postby DavidTreitel » Fri Jul 26, 2019 9:09 pm

Is the accountant a UK accountant or a US accountant or like some of us qualified in both countries? I have met HMRC several times to discuss "lump sums" and HMRCs view is now fairly clear, even if naturally it is not entirely certain if HMRC are accurate. This is a really complex subject and truthfully one that cannot be summarised in a quick reply.

Return to “International Tax”