Retirement Annuity or UFPLS

I'm considering either purchasing a retirement annuity from an insurance company from the total balance of my U.K personal pension. Or I may take drawdown direct from the existing pension plan via UFPLS. I'd not take the 25% tax free option in regards purchasing an annuity, as I understand that this is not a tax free event as far as the IRS are concerned. Also with UFPLS, each distribution has a 25% tax free element, however I can alter the distribution to compensate for the tax free element. Going to flexi access is not an option as the entire 'pension pot' attracts the 25% tax free element, which would be disastrous from an IRS perspective.

Any tips, or things to be aware of from an IRS perspective to my two options?

Thanks

Have you verified that you do not have any F1116 carry forward credits that you would be able to apply against any IRS charge for taking the 25% 'tax-free' element? The words 'tax-free' are an oxymoron - no such thing as free tax!

Annuity rates are generally so poor, you have to live a long time to get the benefit.

If I were you, I'd get a spreadsheet going and do some scenario planning - you might find that the UK tax that you pay on the 75% taxable element can go some way to offsetting any US tax that arises on the 25% element.

Have you verified that you do not have any F1116 carry forward credits that you would be able to apply against any IRS charge for taking the 25% 'tax-free' element? The words 'tax-free' are an oxymoron - no such thing as free tax!

Annuity rates are generally so poor, you have to live a long time to get the benefit.

If I were you, I'd get a spreadsheet going and do some scenario planning - you might find that the UK tax that you pay on the 75% taxable element can go some way to offsetting any US tax that arises on the 25% element.

Agreed Annuity rates are not good at this time. I'd use 1116 credits for UFPLS, as this would work well. Flexi would not though, that big hit would not be covered by any credits.