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: https://www.gov.uk/hmrc-internal-manuals/double-taxation-relief/dt19876a
And is it correct that the money in the Roth IRA doesn't get taxed at all?
Thank you in advance for any feedback!!
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