Tax Planning for US Citizen moving to UK

Ok, reading the previous thread on the 401K subject made me want to try a slightly different one.

I am a US Citizen with a partner (UK citizen currently living in the UK) in the UK and plan to move to the UK in April of '06.  I will be employed and payed through a UK entity of a global company.  This would be a long term move (at least 5 years), though depending on the job, I may be working outside of the US and UK a good portion of the time.  I figure that I have a good opportunity to do some tax planning.

My first question is on 401K.  Does it make sense to leave the 401K rolled over into a qualified investment though I may not work in the US again?  Am I correct in assuming I can't roll that over into the self directed pension schemes in the UK without incurring penalties at least in the US?  Would on option be to withdraw the money in the US, keep it in the US but not move the money to the UK?

The second is that the plan is to take the equity from the sale of the house here in the states (a significant amount) and use that to invest in primary residence in the UK.  What sort of taxes and liabilities will I incur by doing this?

For tax purposes in the UK, does anyone know if the new domestic partnership registration that will go in effect nationally in December of '05 have any tax advantages for us, where I am a US citizen and my partner is a UK citizen?  I know the immigration laws and rules well, but taxes haven't been my forte...

Thanks,
Kit

I don't konw the UK implications of any of these questions but here's what I do know.

You can roll your 401K into a self directed IRA here in the states. I know pensco has one and there are a few others out there. This would let you direct the investment funds without losing your tax-free status if you ever did decide to return to the states. If you withdraw the 401k funds then you will be charged US taxes on the growth of that money and also charged a penalty for early withdrawl.

If you've lived in your home for 2 of the last 5 years (does not have to be consecutive) and your gain from the sale is less than $250,000 (single - married would be $500,000) then your gain is tax free in the US.

You are correct that you can't roll over a US pension plan into a UK one.
You gain a tax savings in the UK by not bringing the money to the UK.
The equity from the US house sale is not taxable in the UK.

The more assets you have, the more sense it makes to have a planning session with a UK tax accountant who knows how US assets are taxed in the UK before you move, not after.

That's because the UK is going to exempt any income you earn from investments kept outside the UK, due to your Non-Domicile status.  If your contract with the UK company is phrased correctly, you may also be Resident but Not Ordinarily Resident at the same time as being Non-Domiciled.  Otherwise, you will be Resident and Non-Domiciled.

Learn more about your Residency and Domicile status for UK tax purposes (very different than for immigration purposes!) at:  http://www.hmrc.gov.uk/pdfs/ir20.pdf

Learn more about tax planning for Non-Domiciled persons at:  http://www.pkf.co.uk/web/PKF800.nsf/pagesByID/ID604E8718D3743C4180256EA10035948A?opendocument

We would also be happy to assist you with your tax planning.

I'm a UK and US citizen living in the US, but planning on returning to the UK in the next couple of years.
My current plan is to transfer all my liquid assets, ie proceeds from sale of the house, bank accounts and
mutual funds to the Uk, but to leave all my retirement (401k, 403b and IRAs) in the US to avoid any penalties.
When I reach 59.5 I'll be able to take funds from those accounts. I assume I'll pay tax on the money in the US
and get an allowance for that when it appears on my UK tax form so that I don't pay tax on it twice. I'm going
to check this with a professional before I move.

Lizzit,

There are a broad range of often questions and issues asked and posed on this thread, just wanted to say....thanks for your expert advise.