Who we help
Retirees & pensioners
Pensions are the least aligned part of the two systems, and the decisions are largely irreversible.
Where a pension is taxed depends on the scheme, the treaty and the timing.
The treaty addresses pensions, but the relief depends on the type of scheme, where you are resident and how you draw it — and a lump sum is not treated like an income stream.
Once drawn, most of these decisions cannot be undone, which makes the order of drawdown worth planning before the first payment.
What we handle
01
UK pensions for US taxpayers
Employer schemes, personal pensions and SIPPs are not treated identically, and the position needs to be consistent year to year.
02
US plans for UK residents
401(k) and IRA distributions, and how the treaty allocates the right to tax them.
03
The tax-free lump sum
The UK's 25% is not automatically tax-free to a US taxpayer. It is one of the sharpest divergences between the systems.
04
State pension and Social Security
Both are covered by the treaty, and generally taxable only in the country of residence.
Why us
Model it before the first drawdown
The order in which you draw from different pots, and in which country you are resident when you do, can change the total materially.
Afterwards there is very little left to advise on, so this is work best done early.
Frequently asked
Is my 25% tax-free lump sum taxable in the US?
Possibly. The UK's treatment does not bind the IRS, and the position is genuinely contested. It is one to take specific advice on before drawing, not after.
Where is my State Pension taxed?
Generally in your country of residence under the treaty, but it still has to be reported correctly in both places.
Where is my 401(k) taxed if I retire to the UK?
Broadly, the treaty gives the country of residence the right to tax periodic pension payments, with specific rules for lump sums. How you draw it therefore matters as much as what you draw.
Can I transfer a UK pension to the US, or vice versa?
Rarely without cost. Transfers between the systems frequently trigger charges, and a QROPS transfer has its own UK consequences. This is worth modelling before initiating anything.
Is my Social Security taxed in the UK?
Under the treaty, US Social Security paid to a UK resident is generally taxable only in the UK. It still needs correct reporting on both sides.
What about the UK 25% tax-free lump sum?
The UK treats it as tax-free. The US position is contested and depends on the treaty analysis taken. It is one of the sharpest divergences and warrants specific advice before drawing.
Should I consolidate my pensions before retiring abroad?
Sometimes, and sometimes consolidation destroys a favourable position. It depends on the schemes involved, so check before transferring rather than after.
Pensions are the least aligned part of the two systems, and the decisions are largely irreversible.
Talk it through
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