Taxation of private pensions from the UK

[cheaberra]

I am a naturalized citizen of the US and fully resident in the US.  I receive a UK state pension which would be taxable in the UK but by treaty is taxed in the US instead. I am about to start drawing from a UK private pension.   My private pension allows me to make a once only 25% withdrawal that would not be taxable in the UK if I still lived there so I believe this 25% payment would be exempt from taxation in the US also according to the treaty. Am I correct?

[LoriLeighEA]

Welcome to the Event, Cheaberra!

When you are a US citizen, all world-wide income is taxable.

This private pension withdrawal would be taxable in the US, but not in the UK.

The PCLS 25% tax-free cash payment is tax-free in the UK, not other countries.

A very common misconception is that this payment is always tax-free in the US. It is not.

Remember taking larger payments could push you into a higher tax bracket if you aren't careful.

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