Hi,
I am processing of cashing in 100% of pension in the UK. I am not entirely sure on how to report the income on my US tax return as follows:
1) The payment will be subject to tax at source. In other words, the UK pension provider will withhold tax on behalf of HMRC. Am I correct in thinking I should report the full value of the cash out (ie pre the UK taxes being withheld) on my US tax return, and not just what is paid to me post UK tax being withheld?
2) The pension provider will use an emergency tax code, as I am no longer a UK tax resident. As such, I will overpay UK tax and I come claim some back. I can also claim taxes back under the US/UK double tax treaty, but that process takes longer. However, either way, is any tax refund from HMRC reportable as income in US? I assume that would only be the case if I report the pension income as what is paid to me after UK tax is withheld and not before it's withheld?
Thank you Richard
