Hi, I know this topic has come up many times before but I still can't really understand how it will actually work, so pls bear with me and all advice will be gratefully received! ( this is also my first post!)
Background.
US and UK citizen, now resident in UK and likely to remain so. I file both UK and US returns each year.
Now retired (64) , UK pension income will be about GBP 37,000 pa. I also get US SS of about 900 USD per month on top.
I have an IRA ( with Vanguard) with a balance of about 600K USD, and this is what I want to start withdrawing from, I thought about 36K USD pa.
So my total global income would be about 90K USD pa.
Am I right in thinking the process would be as follows:-
1. I would ask Vanguard to sell funds and transfer the equivalent of 36K into my US bank account , say split into 4 tranches of 9K each qtr , per year. Will they deduct any tax at source? Or can I just tell them that I will settle up on tax owed on my UK and US tax returns?
2. When I come to complete my US return I would add all my UK / US income and file.
3. On my UK return I would do the same but would have a tax liability on both the US social Security and IRA distributions, all based on the UK tax rates.
4. Given UK tax is higher that US tax I would likely not have to pay any additional US tax.
Is that pretty much it, I also assume the IRA cannot be treated towards my 25% UK tax free lump sum allowance??
Are there any other ways to reduce my US ( or I guess UK tax liability?) - transfers to Roth IRA?
Appreciate any advice / guidance anyone can give, thanks !
