UK Pensions: 25% Lump Sum tax-free - View Single Post
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Old 14th November 2019, 04:55 PM
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Users Flag! Originally from usa. Users Flag! Expat in france.
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I'm very much inclined to agree with Nononymous here. I actually did do a quick search to see what the treaty says you're supposed to do. The IRS site is utterly useless in this regard and just points you to "the treaty" without any sort of explanation.

The remaining sources are all tax "advisers" looking to sell you their services. The first one cites some fairly convincing sounding material proving all the sources that say that these 25% lump sum payouts are free of US tax are WRONG. Then you get all the sources that contend that the payout is not taxable in the US, but only if you file that form 8833. (Which they will do for you for their usual "reasonable fee.")

OTOH, foreign pensions aren't reported to the IRS so they really don't have any way to know that you were paid out in a lump sum. And you can "just assume" from what you've read "somewhere" that it is not taxable the same way it is in the UK.
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