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  • UK taxes and USA IRA

    From Fred J. Tydeman@21:1/5 to All on Thu Nov 2 17:48:56 2023
    If my USA IRA makes an investment in the UK,
    and the UK withholds income taxes on that investment,
    can those UK taxes be used on my 1040 form 1116
    to offset my USA income taxes?
    I believe that there is a tax treaty between USA and UK,
    so non-IRA UK taxes can be used on form 1116.
    Does it matter if the USA IRA is regular or Roth?
    ---
    Fred J. Tydeman Tydeman Consulting
    [email protected] Testing, numerics, programming
    +1 (702) 608-6093 Vice-chair of INCITS/C (ANSI "C")
    Sample C17+FPCE tests: http://www.tybor.com
    Savers sleep well, investors eat well, spenders work forever.

    --
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  • From John Levine@21:1/5 to All on Thu Nov 2 20:20:52 2023
    According to Fred J. Tydeman <[email protected]>:

    If my USA IRA makes an investment in the UK,
    and the UK withholds income taxes on that investment,
    can those UK taxes be used on my 1040 form 1116
    to offset my USA income taxes?
    I believe that there is a tax treaty between USA and UK,

    Yes, there is a tax treaty:

    https://www.irs.gov/businesses/international-businesses/united-kingdom-uk-tax-treaty-documents

    If you look at the technical explanation, it appears that Article 18 says that income of pension schemes (such as IRAs) is generally not taxable so the UK should not withhold tax.

    I know that there is a similar rule in the US-Canada tax treaty and
    indeed, the dividends from Canadian stocks in my taxable accounts have
    tax withheld but the ones in my IRA do not. Good luck sorting it out.

    --
    Regards,
    John Levine, [email protected], Primary Perpetrator of "The Internet for Dummies",
    Please consider the environment before reading this e-mail. https://jl.ly

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2011) - All rights reserved. >>
    << ------------------------------------------------------- >>

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    * Origin: fsxNet Usenet Gateway (21:1/5)
  • From Stuart O. Bronstein@21:1/5 to John Levine on Fri Nov 3 12:45:04 2023
    "John Levine" <[email protected]> wrote:
    According to Fred J. Tydeman <[email protected]>:

    If my USA IRA makes an investment in the UK,
    and the UK withholds income taxes on that investment,
    can those UK taxes be used on my 1040 form 1116
    to offset my USA income taxes?
    I believe that there is a tax treaty between USA and UK,

    Yes, there is a tax treaty:

    https://www.irs.gov/businesses/international-businesses/united-king dom-uk-tax-treaty-documents

    If you look at the technical explanation, it appears that Article
    18 says that income of pension schemes (such as IRAs) is generally
    not taxable so the UK should not withhold tax.

    I know that there is a similar rule in the US-Canada tax treaty
    and indeed, the dividends from Canadian stocks in my taxable
    accounts have tax withheld but the ones in my IRA do not. Good
    luck sorting it out.

    There are US qualified tax professionals in many parts of the world,
    including more than 500 in the UK. They can be found on the IRS
    Preparer Directory, here:

    https://irs.treasury.gov/rpo/rpo.jsf


    --
    Stu
    http://DownToEarthLawyer.com


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    www.avg.com

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2011) - All rights reserved. >>
    << ------------------------------------------------------- >>

    --- SoupGate-Win32 v1.05
    * Origin: fsxNet Usenet Gateway (21:1/5)
  • From Alan@21:1/5 to Fred J. Tydeman on Fri Nov 3 19:57:24 2023
    On Thursday, November 2, 2023 at 2:50:05 PM UTC-7, Fred J. Tydeman wrote:
    If my USA IRA makes an investment in the UK,
    and the UK withholds income taxes on that investment,
    can those UK taxes be used on my 1040 form 1116
    to offset my USA income taxes?
    I believe that there is a tax treaty between USA and UK,
    so non-IRA UK taxes can be used on form 1116.
    Does it matter if the USA IRA is regular or Roth?
    ---
    Fred J. Tydeman Tydeman Consulting
    [email protected] Testing, numerics, programming
    +1 (702) 608-6093 Vice-chair of INCITS/C (ANSI "C")
    Sample C17+FPCE tests: http://www.tybor.com
    Savers sleep well, investors eat well, spenders work forever.

    --
    Income inside a tax deferred account is not subject to United States income tax. As such, you can not deduct any foreign taxes paid nor can you take a tax credit for any foreign taxes paid. This is true for traditional IRAs and Roth IRAs. This is one
    reason why you may not want to keep foreign investments in a tax deferred account. Naturally, there are other reasons to keep foreign investments in a tax deferred account.

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2011) - All rights reserved. >>
    << ------------------------------------------------------- >>

    --- SoupGate-Win32 v1.05
    * Origin: fsxNet Usenet Gateway (21:1/5)