US-UK Tax

Is my IRA taxable in the UK if I live there?

Answered by Jordan Onraet-Wells, Founder & Chartered Tax Adviser (CTA). Published 28 September 2026. Last reviewed 28 September 2026.

The short answer

Usually, yes. If you are UK resident, regular payments from a traditional IRA are taxable in the UK at your normal Income Tax rates, because Article 17(1) of the UK-US treaty gives taxing rights over pensions to the country where you live. Since March 2025 HMRC also treats lump-sum distributions from taxable US pension plans as UK-taxable, with credit for US tax paid. A qualified Roth IRA distribution is the exception: the treaty makes the UK mirror the US exemption, so it is generally tax-free here.

Regular traditional IRA payments to a UK resident are taxable in the UK under Article 17(1) of the UK-US treaty, at your marginal rate, because the contributions and growth were tax-deferred and never taxed.
Lump sums: since 12 March 2025 HMRC's view is that lump-sum distributions from taxable US pension plans are also taxable in the UK, with foreign tax credit relief for US tax paid, reversing the old UK-exempt reading of Article 17(2).
UK Income Tax runs to 45%, above the top US federal rate, so the credit reduces but does not always eliminate the UK charge on a large lump sum.
A qualified Roth IRA distribution is generally UK tax-free under the treaty's mirror rule in Article 17(1)(b).
US citizens and green-card holders stay in the US tax net under the saving clause and claim foreign tax credits; non-US persons should generally be able to avoid or reclaim US withholding on periodic payments.
The US 10% additional tax on withdrawals before age 59 and a half is not removed by the treaty, and the UK's 25% tax-free lump sum does not apply to an IRA.

Regular payments: the UK taxes them

As a UK resident you are normally taxed on worldwide income, and a traditional IRA is no exception. Article 17(1)(a) of the UK-US treaty makes pensions taxable only in the state where you live, so a regular stream drawn from a traditional IRA is UK pension income, taxed at your marginal rate and reported through Self Assessment. Because the money went in pre-tax and grew untaxed, the whole gross payment is income, unlike a Roth. If you are not a US citizen or green-card holder, the treaty assigns the taxing right to the UK and correctly certified US withholding should be avoidable or reclaimable, so you are not taxed twice. Our guide to 401(k), IRA and Roth UK tax treatment sets out each account type, and the double tax relief guide explains how credits work.

Lump sums changed in March 2025

Until 2025 many advisers read Article 17(2), which makes a lump sum taxable only in the state where the scheme is established, as leaving a US IRA lump sum UK-exempt. On 12 March 2025 HMRC updated its guidance: lump-sum distributions from taxable US pension plans are now treated as taxable in the UK as well, with foreign tax credit relief for the US tax. HMRC gets there through the saving clause in Article 1(4). Article 17(2) is not among the provisions protected by Article 1(5), so the residence state can still tax its own resident. The practical effect is UK Income Tax at up to 45% on the payment, with credit for US tax reducing but not always eliminating the charge, and a large lump sum can push you into higher bands in a single year. Timing now matters, as our UK-US treaty guide explains.

Reporting, and who gets taxed twice

Taxable IRA payments go on the foreign pages of your UK Self Assessment return, converted to sterling, with foreign tax credit relief claimed for any US tax properly due. Even a Roth distribution that ends up exempt should be disclosed with the treaty exemption claimed. If you are a US citizen or green-card holder, the saving clause lets the US tax the same income, so you file a US return on the same distributions and claim credits to avoid double tax; the direction of credit depends on the type of income and the sourcing rules, which is where coordination pays. Keep your 1099-R forms and note whether each payment was periodic or a lump sum, because the treatment differs. Our guide for Americans living in the UK covers the parallel US filings.

Go deeper

Sources and further reading

This is general information for the 2026/27 UK tax year, not personal tax advice; speak to a Chartered Tax Adviser about your own position.

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