Hi all, I'm hoping someone out there can help me.
I'm a UK expat now living in the US. I have an old UK pension that is hanging out and seems to not be moveable at all (no QROPS or treaty with the US or something). Anyway, I understand that the rules on withdrawals have now changed and wanted to check my understanding.
So, first, I don't have to buy an annuity any more, right? I can take periodic lump sums at/after the age of 55. Also, 25% of my lump sum is UK tax free, and the remaining amount is taxed in the UK subject to whatever my UK income is. But the standard deduction is ₤10,600 this year, so let's say I was doing it this year, as long as I keep 75% of my total withdrawal below ₤10,600, I shouldn't have to pay any UK tax. So I could take out up to ₤14,133 per year - 25% of it would be tax free, and the other 75% = the standard deduction. Now, of course, when I move the money to the US it will be subject to US income tax, but that's fine as I can adjust my income accordingly to make sure I'm not going over any tax brackets I don't want to.
Then can I repeat every year until the money is gone? It'd be nice to deplete this account quickly so I don't have to file a damn FBAR form with the US IRS any more, and I'd rather not have to buy an annuity like under the old rules. I'd like to be able to use this to partially fund my ER from age 55 to age 59.5 when 401k withdrawals from my US accounts are allowed. [Well, technically I could withdraw from the 401k earlier but let's just assume I want to keep things simple.] Although it's a few years off, I like to be sure that my plan is somewhat logical. Right now the money would last approx. 5 years if I withdrew ₤14k a year, but by the time I am 55 it should have grown (although the standard allowance should grow too, I hope).
Any comments? Thanks in advance!