Reporting 401K and IRA on UK tax return

Thanks all, although I am slightly more confused now!  There are no contributions or distributions to the IRA and 401K, but I assume there are dividends being paid, and possibly my husband may have sold some mutual funds and reinvested in others (but all within the IRA/401K account with no money entering or leaving the account.)

I guess we will just write a statement and leave it at that.

That is correct - as these are not UK registered pension plans they are not pension plans at all under domestic UK law, so gain no deferral from UK tax under UK law. If you wish, you can decide on a year by year basis whether you want to elect into the treaty. If you do, it is wise to use HMRCs suggested wording each year for this election.

You may also need to consider member and scheme charges if the annual or lifetime limits are exceeded.

So, my original question was, where does it say you have to report pension funds to HMRC such as an IRA if you are not making contributions and not taking distributions? (the links provided above are about exempting contributions from UK taxation)

As Guya points out an IRA is not a pension fund under UK rules. The treaty allows gains within the fund to be exempted from UK taxation. Without the treaty the funds would be fully taxable as offshore funds. You could argue that gains within the fund are as much contributions as any made by you or your employer from tax deferred wages.

I would not assume that the application of the treaty is implied and I would inform HMRC of any US pensions and that any investment gains within them are exempt from current taxation under the treaty.

Your point is well taken though as in the situation that a US citizen owns a UK pension fund the IRS people at the US embassy take the stance that you don't need to claim a treaty exemption for them on your US taxes. However, I think this is bad advice and I would always claim the exemption as there are other ways of dealing with them on your US taxes.

Here is the discussion with how to deal with UK pensions on US taxes.....

http://talk.uk-yankee.com/index.php?topic=81730.0