Hi all,
Haven't been on here in eons, moved to UK almost 3 years ago, now hubby has retired and we need to start planning on what to do regarding retirement funds. Some background, I'm dual citizen, under 60 and still working. DH is 66, retired a couple months ago, US citizen on UK spousal visa. Since moving here we've been filing US and UK tax returns. Think both our US and UK accountants are competent, but each really only looks at our tax situation from the perspective of the jurisdiction they work in.
We have lots of 401k and IRA accounts between us. I will qualify for both US SS and UK SP, DH will only get US SS and we plan to defer it to age 70.
From the perspective of our US accountant my DH is now in the 'donut hole' where he has no SS income yet and no earned income, and we should start drawing from his 401k/IRA to minimize the tax liability on the withdrawals. From reading on here, i get the impression that actually it will be the UK who we pay tax to on the distributions, based on the tax treaty, but I assume the advice still holds true, withdraw now before SS and mandatory IRA/401k distributions increase taxable income in 4 years time? So that's my first question, is my thinking correct here?
Secondarily, what about the possibility of non-dom status? Up to now we haven't explored the option of remittance basis taxation for him since it seemed that the arising basis, and corresponding personal allowance, made more sense. Now I'm wondering if saying he's non-dom (which it seems to me he is), choosing remittance basis, and having 401k/IRA withdrawals paid into our US bank accounts and left there, would mean no UK tax to pay? And not sure what it would mean re: US taxes?
I'm sorry this is so long, but hopefully if i can get a few of the basics answered it will give us a steer on what we should be attempting to do, then we can deal with the practicalities of how to do it :-) We are in the lucky position of not needing the 401k/IRA funds to live on in the immediate future since muggins here is still gainfully employed :-)
Cheers, J.
