revisiting UK taxation of US income

Regarding taking your 401a as a lump sum if you were back in the UK. None of it would be taxed by HMRC as, unlike the USA, they do not invoke the savings clause. I and my wife have made a number of lump sum withdrawals from our IRAs while living here and in every instance they have only been taxed by the IRS. (The tax treaty says a lump sum withdrawal is only taxable by the country in which the account is, but the IRS invoke the savings clause so lump sums withdrawn from a UK “IRA” is fully taxed by the IRS.)

Ah, well that solves that problem then. (And that stinks about the UK IRA!)

EDIT -  I'm still better off waiting until I'm in the UK, as my SS earnings won't be being considered in my IRS calculations. Now I have to just hope it holds enough value. Will still probably draw down some here, but not the main part.

Ah, well that solves that problem then. (And that stinks about the UK IRA!)

Fortunately that doesn’t affect me, but there are plenty where it does. Not even the 25% lump sum that is tax-free in the UK is exempt from the IRS.

If I waited to take it in the UK, the first 25% of it as a lump sum distribution would not be taxed, correct? So the taxable amount would be $18,750.  This would be taxed at the Scottish Basic Rate of 20%, since my SS income would have pushed me just into that tax band. So that would be $3,750 on the DCP. (+/-)

Just noticed this in your recent post.  In the UK, there is no 25% tax free allowance on foreign pensions - only UK ones.  Pretty sure that's correct, but do your own research.