My recent experience with Fidelity is consistent with previous posts. I am a UK citizen and taxpayer and have a 401(k) I contributed to over 20years ago. I am near the age when I will be obliged by the IRS to make minimum annual withdrawals, so I decided to set up to withdraw close to the minimum annual amount ( less than 5%, so not a lump sum withdrawal as defined by the IRS ).
After reviewing the IRS and UK-US tax treaty I sent a W8BEN to Fidelity claiming the 0% tax rate for withdrawals. I had to phone them to confirm they had received it and had noted the fact on my account.
I made a withdrawal and the statement at the time of withdrawal showed 0% tax deducted so the Net amount was the same as the gross...Success ? ...No!
...A few days later my bank account showed a smaller amount had been transferred...
.. The Fidelity account now showed a statement of 30% withholding deducted from the taxable amount.
.. I phoned the Fidelity number to point out their error, but they gave me the same story that 'non-periodic withdrawals are taxable, and foreign citizens are subject to 30%withholding'
Thus ignoring the W8BEN..
It has taken me months to set up the bank transfers, wire transfer agreements, foreign exchange etc, so it is very frustrating lose 30% of my savings for at least a year,when I will have to pay tax on it in the UK.
.. so what now