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Topic: Cash out 401k? What is a remittance in the tax year you move?  (Read 527 times)

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    • Englishmann
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  • Location: Berkshire, UK
Cash out 401k? What is a remittance in the tax year you move?
« on: September 05, 2009, 03:01:38 PM »
I have three questions for those of you who've settled in the UK after time in the US:

1. I'm assuming that it's best to sell our home in the tax year prior to the year in which we move to the UK.  Otherwise the income from the sale of the home would be taxable in the UK correct? (it's not taxable in the US, which gives you an exemption of up to $250,000)

2. If you want os suspect that you'll need the cash, is it a good idea to cashout your 401k before moving?  I know the penalty plus tax rate will be 40% cut in the US.  If I do it before April 5th though, and we move after April 5th then my assumption is that the UK won't tax it (because it's just savings at that point).

This leads to my second question:
2. In that tax year that you settle in the UK, are your savings in the US that you then transfer to a UK account, considered "income" or a remittance that would incur tax?

Thanks in advance for any help - the whole concept of "remittance" is a bit difficult for me.

11/99 - Moved to UK on Work Visa
07/00 - Married UKC
02/01 - Moved to Texas
04/10 - Received Spouse Visa - ILE
06/10 - Moved to England


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Re: Cash out 401k? What is a remittance in the tax year you move?
« Reply #1 on: September 05, 2009, 11:18:37 PM »
You may want to look at HMRCs manual: http://www.hmrc.gov.uk/cnr/rdrm-remittances.pdf


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    • Englishmann
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  • Joined: Sep 2009
  • Location: Berkshire, UK
Re: Cash out 401k? What is a remittance in the tax year you move?
« Reply #2 on: September 10, 2009, 03:10:40 PM »
Thanks for that link- I think we should be ok looking at things because we can be remittance basis for the last years we're here in the US (been here for 9).  THen accrual basis when we want to return. 
11/99 - Moved to UK on Work Visa
07/00 - Married UKC
02/01 - Moved to Texas
04/10 - Received Spouse Visa - ILE
06/10 - Moved to England


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