W8-BEN Form and US Tax

Seems like TIAA are a lot more alert and aware than Fidelity, who I think would not be capable of such a relevant response.

I did what I intended and withdrew my entire IRA as a lump sum, and am now, like you, waiting for my 1042-S to claim back a fairly small but still useful amount of tax.

Luckily I still have a US bank account to get the IRS to deposit the refund into, and a wiring arrangement with that bank to get the money  back to the UK. (Unfortunately my reading of the 1040NR instructions suggests that the IRS will not wire to a non-US bank, and will simply send a check in dollars to a foreign address, presenting an extra delay on top of the six months they tell you the refund will take! see quote below)

This makes me free of the IRS from here on - a great relief!

https://www.irs.gov/individuals/international-taxpayers/helpful-tips-for-effectively-receiving-a-tax-refund-for-taxpayers-living-abroad
Helpful Tips for Effectively Receiving a Tax Refund for Taxpayers Living Abroad
The quickest way to receive your refund is by direct deposit to a checking or savings account, including an individual retirement arrangement. However, you need a U.S. account to request direct deposit. If you do not have a U.S. account, or do not choose to receive your refund via direct deposit, a check will be mailed to the address you provided on your tax return.
To help ensure your refund check is mailed to the correct mailing address, you should carefully review and follow the Name and Address section in the instructions to the corresponding Form 1040 or 1040NR in order to provide a complete and accurate address on your tax return.

Seems like TIAA are a lot more alert and aware than Fidelity, who I think would not be capable of such a relevant response.

I did what I intended and withdrew my entire IRA as a lump sum, and am now, like you, waiting for my 1042-S to claim back a fairly small but still useful amount of tax.

Luckily I still have a US bank account to get the IRS to deposit the refund into, and a wiring arrangement with that bank to get the money  back to the UK. (Unfortunately my reading of the 1040NR instructions suggests that the IRS will not wire to a non-US bank, and will simply send a check in dollars to a foreign address, presenting an extra delay on top of the six months they tell you the refund will take! see quote below)

This makes me free of the IRS from here on - a great relief!

https://www.irs.gov/individuals/international-taxpayers/helpful-tips-for-effectively-receiving-a-tax-refund-for-taxpayers-living-abroad
Helpful Tips for Effectively Receiving a Tax Refund for Taxpayers Living Abroad
The quickest way to receive your refund is by direct deposit to a checking or savings account, including an individual retirement arrangement. However, you need a U.S. account to request direct deposit. If you do not have a U.S. account, or do not choose to receive your refund via direct deposit, a check will be mailed to the address you provided on your tax return.
To help ensure your refund check is mailed to the correct mailing address, you should carefully review and follow the Name and Address section in the instructions to the corresponding Form 1040 or 1040NR in order to provide a complete and accurate address on your tax return.

Thanks, that is really helpful. I have a US bank account, but it is a small credit union and they really aren't great at international wiring (I think they do it via Wachovia and last time I went through it I think I was there for an hour - and then they got it wrong/didn't send it!) I also am a bit worried that either (a) the IRS will think I am really not a nonresident, or (b) someone at my US bank will want to close my account because I am a nonresident (it still comes in handy for some things). They have my UK address and I am astounded that so far they haven't had an issue with me living in the UK. I just wish I'd opened an account with a larger US bank as that would make some of these things a  bit easier.

I likely will just take the check/checque from the IRS and pay into my Barclays dollar account here in the UK (for which no doubt they'll charge me for paying in a check drawn on an overseas bank).

Like you, I will be grateful when I have (almost) finally cut my ties with TIAA-CREF and the IRS, which will be in about 3 years after I have withdrawn (almost) everything. The (almost) is the portion of my TIAA that is from TN employment, as that plan requires me to take out a lifetime annuity with 50% of the value. At least TIAA will wire to the UK fee-free and with a decent exchange rate.

ETA: Crap, just spotted this in the link you provided: "Please allow up to 6 months from the original due date of the 1040NR return or the date you actually filed the 1040NR, whichever is later to receive any refund due." [head in hands]

Yes exactly: this is why I mentioned the extra delay!  If you take the latest due filing date as June 15th (for non-residents not receiving wages), this means the check won't arrive until mid-December!

My US account is also with a credit union, but because it's based around a university they seem very (unusually) comfortable dealing with foreign customers.  I only kept the account open to deal with the tax refund I hoped I would get, so let's hope their policy doesn't change between now and my hopeful refund arriving in Jan 2018!

In your case it must help having a dollar account in the UK I think (?) perhaps that avoids the 6-9 weeks UK banks tell you they will take to cash a dollar check by collection.

I must say I think the whole distribution mess is a catastrophe, and I have to say, if I had suspected this I would not have entered the 401k/IRA system at all.  I think what I have got back is almost exactly what I put in: it's kept up with inflation through growth but that's all.

Admittedly this is partly my fault for taking all the money as a lump sum so incurring high tax rates- but seriously who would want to wait for a year to collect the full amount of any pension distribution every single year that they take one?

I think you might have had a better experience with Vanguard or if you had withdrawn your money using a 72t arrangement or converted it to an annuity.

When I retired I asked Both Vanguard and my state pension administrator about their policy. The state pension had clear procedures for delivering payments overseas and there's no extraordinary withholding because a pension is a periodic payment


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Yes, I was naive when I rolled over my 401k to Fidelity.  I informed them I was not a US citizen, would be back in the UK at retirement, and would be claiming distributions form the UK.

I asked if there were any restrictions, any problems, any extra difficulties I would have to deal with in order to claim the money when I needed it.

Of course they said none, no, it's not a problem , no restrictions. I suppose that may even have been true back then (2009).

It is Fidelity's stated policy now to withhold 30% tax to all foreign distributions and ignore tax treaty requirements. I've been told this several times. I do not think they would change this for 72t arrangements, as they say they cannot even do any kind of periodic payment arrangement "for tax reasons" even if you withdraw after normal penalty-free withdrawal age.

I believed them, and was too trusting.  My fault.

Just an update that I have managed miraculously to make a $9k "cash withdrawal" (their terms) from TIAA-CREF without the 30% withholding.

Actually, that isn't completely true - they had to withhold it then refund it (go figure).

Considering the blood, sweat and tears over the past 2+ years, I still can't believe it.

Of course, it was accompanied by the following caveat: "While I cannot comment at this time if the 30% tax can be suppressed on future withdrawal requests ..."

I'll keep you updated. I plan to make another withdrawal in the new tax year (so in less than a month).

I am now in process of claiming back the 30% deducted from my IRA disbursement by Fidelity and using 1040NR-EZ and Schedule OI.  However, I have to fill in the Tax Treaty Article number on Schedule OI and I have read the US/UK tax treaty backwards and forwards and still cant find a number. Has anyone else filled out this form and knows the number?  Knowing the IRS leaving a blank square will hold it up for ever!

I am now in process of claiming back the 30% deducted from my IRA disbursement by Fidelity and using 1040NR-EZ and Schedule OI.  However, I have to fill in the Tax Treaty Article number on Schedule OI and I have read the US/UK tax treaty backwards and forwards and still cant find a number. Has anyone else filled out this form and knows the number?  Knowing the IRS leaving a blank square will hold it up for ever!

Here is the relevant portion- without knowing your exact circumstance it is probably 17.1(a) you need to reference:

ARTICLE 17
Pensions, Social Security, Annuities, Alimony, and Child Support
1. a) Pensions and other similar remuneration beneficially owned by a resident of a Contracting State shall be taxable only in that State.
b) Notwithstanding sub-paragraph a) of this paragraph, the amount of any such pension or remuneration paid from a pension scheme established in the other Contracting State that would be exempt from taxation in that other State if the beneficial owner were a resident thereof shall be exempt from taxation in the first-mentioned State.

2. Notwithstanding the provisions of paragraph 1 of this Article, a lump-sum payment derived from a pension scheme established in a Contracting State and beneficially owned by a resident of the other Contracting State shall be taxable only in the first-mentioned State.

I am now in process of claiming back the 30% deducted from my IRA disbursement by Fidelity and using 1040NR-EZ and Schedule OI.  However, I have to fill in the Tax Treaty Article number on Schedule OI and I have read the US/UK tax treaty backwards and forwards and still cant find a number. Has anyone else filled out this form and knows the number?  Knowing the IRS leaving a blank square will hold it up for ever!

Without knowing your circumstances, it is highly likely that you will owe UK tax if you rely on 17(1)(a).  You will therefore want to make sure you are registered for self-assessment and file a UK tax return.

Just for information, in case anyone finds it useful.

I requested a complete distribution of my IRA account (funded from 12 years employment in US; am UK citizen and resident, non-resident in US since 2010 and non green-card holder) and filled in 1040NR to get tax refund on this distribution. 

1040-NR form was delivered to IRS April 3rd 2017, and despite the refund being dependent on  a 1042-S form, which the IRS themselves say can take six months from the date of return submission or last date that return could be legally filed (June 15th for non-resident non -salary earners), whichever is later, to process I just got my refund paid into my US bank account on May 1st, approximately 8 months sooner than I was expecting!!

Well done IRS!

Having read this thread with much interest, can I just ask if there is any difference for a dual citizen in this situation?  There are so many references to NRA, but I wonder why there should be any difference. My husband is a US citizen, will be resident in the U.K. In retirement, and will be receiving distributions from US company pension (defined benefit), social security, IRA, and NQDC - all periodic payments, not lump sums. He will start receiving company pension this year while still a RB taxpayer. We think he should not remit any payments to the UK this tax year. Next year he will pay taxes on AB, so his plan is to start receiving all retirement benefits in the U.K. Does that make sense as a sensible plan?

As a UK resident with a Fidelity IRA
I am finally accepting that Fidelity will not honour my W-8 BEN and will withhold 30% on withdrawals.

My problem is now how to report this to HMRC. I am advised that I have to report the gross amount which is taxed. also if I get a refund from US IRS via a 1040NR I'm a told I will get some but not full relief on it.

Has anyone successfully managed to complete a self assessment which HMRC accept given the relevant details, in particular full relief on an IRS refund.

As a UK resident with a Fidelity IRA
I am finally accepting that Fidelity will not honour my W-8 BEN and will withhold 30% on withdrawals.

My problem is now how to report this to HMRC. I am advised that I have to report the gross amount which is taxed. also if I get a refund from US IRS via a 1040NR I'm a told I will get some but not full relief on it.

Has anyone successfully managed to complete a self assessment which HMRC accept given the relevant details, in particular full relief on an IRS refund.

Here's my understanding, and my plan of action. I'm a non-USC, non-US resident. I made a withdrawal from my TIAA-CREF 403(b) plan in the 2016-2017 year and have submitted a 1040-NR to get the 30% withholding back from the IRS, that TIAA-CREF erroneously withheld.

In my 2016-2017 self-assessment, I have declared the full amount withdrawn, even though I still haven't received 30% of it (yet). It's my understanding this is what HMRC expects you to do.

When I eventually (hopefully) receive a refund of the 30% that was incorrectly withheld, I don't plan to declare it in the year I receive it, as logically it was 2016-2017 income albeit it was (will be) delayed. I've already paid tax on it to HMRC in the 2016-2017 year. Doesn't make sense to declare it twice, at least not to me (puts fingers in ears and sings "Dah de Dah de Dah")

Thanks very much for your (positive!) reply-there is hope yet!! Did you submit any other stuff with the dreaded 1040NR..some mention the 1042 S issued , hopefully, by in my case enough time to reach the 1040 deadline?. I withdrew in March 30 2017 so will claim refund based on the US 2017 tax year. As far as the refund feel free to let me know if the "dad de day de dah" works,

Thanks

Thanks very much for your (positive!) reply-there is hope yet!! Did you submit any other stuff with the dreaded 1040NR..some mention the 1042 S issued , hopefully, by in my case enough time to reach the 1040 deadline?. I withdrew in March 30 2017 so will claim refund based on the US 2017 tax year. As far as the refund feel free to let me know if the "dad de day de dah" works,

Thanks

Yes, I submitted the 1042S form (though it took TIAA-CREF an age to provide it ... I think it was among the last of the various tax reporting forms that it supplies to customers). I also completed Schedule OI (Other Information) on the 1040NR, and provided a very brief cover letter.

Your post has reminded me to look into whether I can check on the status of my refund online. I posted elsewhere here about the delay in refunding tax to people with NR status, but I can't recall whether I can check that my tax return was even received. As the refund was fairly substantial (ca. $5,600), I'd like to receive it ASAP. As I have also paid tax to HMRC on the amount, I'm currently in the situation of having received only 50% net of the amount ostensibly withdrawn. Grumble, grumble.

I'l certainly post on here whenever I receive it with any updates on process. IIRC, I have to receive it as a checque, in USD, which is just great (not). If I'd received it from TIAA-CREF, it would have been wired (free), with an excellent exchange rate.

OK, I'll stop whingeing now.

[ETA: I discovered the "Where's my refund?" service and the IRS2Go phone app. Both say they can't give me any information, which is a bit concerning considering it is more than two months since I submitted my 1040NR]