Big caveat up front: I am not a lawyer! This is 100% a layman’s reading of the tax treaty – it’s entirely up to you to confirm my interpretations. I’ve tried to call out situations where there are various interpretations so you can make your own judgment or seek out professional advice. Don’t try to rely on anything I say in court!
This post is meant to be a high-level overview of the US/UK tax treaty, especially as it applies to US citizens living in the UK. The treaty is 61 pages long, and the US Department of the Treasury explanatory notes on the treaty are another 131 pages.
I am not going to do justice to a document of that length and complexity in a single post! But what I do want to do is start getting you familiar with what the treaty is, and dive a little bit into the key parts that are relevant for us.
The US/UK Tax Treaty in 3 Bullets
There’s a lot of detail below – I encourage you to read it. But if you take away just 3 things about the US/UK Tax Treaty, I think they should be:
- The treaty protects you from double taxation – you should only ever pay the higher tax imposed by the US or UK, but not a higher plus another lower tax (you might pay the lower tax to one country and then the difference to the other)
- There are a number of mechanisms to protect pensions (including 401(k), IRA, etc.) – the tax treaty helps you to save for retirement. It’s other rules that make it difficult (PFIC, FATCA, MiFID/PRIIP, HMRC Reporting Funds, etc.).
- Just because the treaty says you can do something, doesn’t mean you have to or its a good idea – prime example is that you can exclude your UK pension contributions from your US income, but you probably shouldn’t.
What is the US/UK Tax Treaty?
Officially, the UK/USA Double Taxation Convention of 2001, it’s an international treaty between the governments of the United States and United Kingdom, aimed at avoiding double taxation and preventing tax evasion. It replaces an older agreement from 1975.
The full treaty text is available here. The technical explanation is very helpful in understanding the treaty, although it’s written by the US side and isn’t necessarily binding. HMRC also has a “Double Taxation Manual” that helps interpret from the UK side. I haven’t seen any big areas where the countries disagree, at least so far.
The rest of this post will go through the key parts of the treaty one by one. I’ve included the actual text of the treaty, and then some plain language commentary from me about what that part means to the typical American in the UK, informed by the technical explanation and the double taxation manual. Once you’ve looked through this overview, I’d encourage you to dig deeper on any parts that are particularly interesting or concerning to you!
The Savings Clause
Most US tax treaties include a clause to the effect that the US can tax its citizens however the US wants, regardless of where they live, and the other country can tax its residents however they want. In the US/UK tax treaty, that’s at Article 1, Paragraph 4:
4. Notwithstanding any provision of this Convention except paragraph 5 of this Article, a Contracting State may tax its residents (as determined under Article 4 (Residence), and by reason of citizenship may tax its citizens, as if this Convention had not come into effect.
Fortunately, paragraph 5 gives us some exemptions, where the treaty applies to US tax on US citizens, and to UK tax on UK residents:
5. The provisions of paragraph 4 of this Article shall not affect:
a) the benefits conferred by a Contracting State under paragraph 2 of Article 9 (Associated Enterprises), sub-paragraph b) of paragraph 1 and paragraphs 3 and 5 of Article 17 (Pensions, Social Security, Annuities, Alimony, and Child Support), paragraphs 1 and 5 of Article 18 (Pension Schemes) and Articles 24 (Relief From Double Taxation), 25 (N0n-discrimination), and 26 (Mutual Agreement Procedure) of this Convention;
b) the benefits conferred by a Contracting State under paragraph 2 of Article 18 (Pension Schemes) and Articles 19 (Government Service), 20 (Students), 20A (Teachers), and 28 (Diplomatic Agents and Consular Officers) of this Convention, upon individuals who are neither citizens of, nor have been admitted for permanent residence in, that State.
Whew! That’s a lot of paragraphs, I know. In plain English:
- 5a says that all the paragraphs listed there apply to US citizens whether they live in the US or UK, and to UK residents in the UK. We’ll go through each of those paragraphs in the rest of this post.
- 5b says that those paragraphs don’t apply to people who are not citizens or permanent residents of the US or of the UK, depending which benefits you’re looking at. This mostly applies to people temporarily in a country as a student, teacher, government assignment, etc. Since this site is focused on Americans living in the UK permanently, or at least long term, I won’t go into this part in more detail in this post.
Article 9: Associated Enterprises
2. Where a Contracting State includes in the profits of an enterprise of that State, and taxes accordingly, profits on which an enterprise of the other Contracting State has been charged to tax in that other State, and the other Contracting State agrees that the profits so included are profits that would have accrued to the enterprise of the first-mentioned State if the conditions made between the two enterprises had been those that would have been made between independent enterprises, then that other State shall make an appropriate adjustment to the amount of the tax charged therein on those profits. In determining such adjustment, due regard shall be paid to the other provisions of this Convention and the competent authorities of the Contracting States shall if necessary consult each other.
This paragraph applies to businesses, and their managers and directors, that manage a business in the other country. It doesn’t apply to most typical Americans in the UK, so I’ll skip it, aside from saying that if you’re running a business with elements in both the US and UK, you should probably talk to a professional
Article 17: Pensions, Social Security, Annuities, Alimony, and Child Support
Now we’re getting to parts that apply to more of the audience of this site. We’ll go through each paragraph that isn’t excluded by the Savings Clause one by one.
Sub-Paragraph b) of Paragraph 1
(b) Notwithstanding sub-paragraph a) of this paragraph, the amount of any such pension or remuneration paid from a pension scheme established in the other Contracting State that would be exempt from taxation in that other State if the beneficial owner were a resident thereof shall be exempt from taxation in the first-mentioned State.
All the mentions of states and such gets confusing, so lets use clearer words typical of an American in the UK: You are a resident of the UK. Anything paid from a pension in the US that would be exempt from tax in the US if you were a resident of the US, is also exempt from tax in the UK.
For example, a distribution from a US 401(k) or IRA to a UK resident would be exempt from UK tax to the same extent it’s exempt from US tax if it was distributed to a US resident – for a Roth IRA, that’s tax-free, for a Traditional 401k, it’s taxable income.
This is potentially a very useful paragraph, because it means that even though the UK doesn’t have a direct equivalent to an IRA, you can still use your IRA and get both US and UK tax benefits on it. You can also hold on to any 401(k), 403(b), TSP, etc. that you have in the US and not be penalized when you withdraw from them in retirement.
3. Notwithstanding the provisions of paragraph 1 of this Article, payments made by a Contracting State under the provisions of the social security or similar legislation of that State to a resident of the other Contracting State shall be taxable only in that other State.
Another handy one – if you qualify for US Social Security, those payments can only be taxed by the UK, not by the US. Your Foreign Tax Credits might have taken care of any US tax anyway, but this provides further cover.
Note that this applies if you were to qualify for a UK State Pension and then move back to the US – the UK wouldn’t be able to tax you on your State Pension.
But it doesn’t apply for a UK State Pension if you stay in the UK. If you’re a US citizen living in the UK and receiving a UK State Pension, both the UK and US can tax the State Pension. In practice, you definitely won’t be double taxed, due to Foreign Tax Credits, and the same FTCs will probably wipe out any US tax at all, but it does add to the pain of your US tax return.
5. Periodic payments, made pursuant to a written separation agreement or decree of divorce, separate maintenance, or compulsory support, including payments for the support of a child, paid by a resident of a Contracting State to a resident of the other Contracting State, shall be exempt from tax in both Contacting States, except that, if the payer is entitled to relief from tax for such payments in the first-mentioned State, such payments shall be taxable only in the other State.
Divorce is an area of tax I’m luckily not very familiar with, so I won’t comment on this in any detail except to say that if you’re paying alimony or child support and you live in one country while your former spouse lives in the other, this is worth looking into further.
Article 18: Pension Schemes
Here’s another important one for Americans in the UK who are saving for retirement – and the term “pension scheme” is broader than it might sound at first.
1. Where an individual who is a resident of a Contracting State is a member or beneficiary of, or participant in, a pension scheme established in the other Contracting State, income earned by the pension scheme may be taxed as income of that individual only when, and subject to paragraphs 1 and 2 of Article 17 (Pensions, Social Security, Annuities, Alimony, and Child Support) of this Convention, to the extent that, it is paid to, or for the benefit of, that individual from the pension scheme (and not transferred to another pension scheme).
Plain English example: You are a resident of the UK. You have a pension (401(k), IRA, etc.) in the US. Income from that pension can only be taxed when it is paid to you, or for your benefit. It can’t be taxed just because you moved it to another pension (like rolling over a 401(k) to an IRA or changing IRA providers).
Converting Traditional to Roth IRAs is a little more complicated, I’ll write a dedicated post on that in the future because it’s potentially really helpful.
This is a long one, so I’ll break it down into sub-paragraphs:
5 (a) Where a citizen of the United States who is a resident of the United Kingdom exercises an employment in the United Kingdom the income of which is taxable in the United Kingdom and is borne by an employer who is a resident of the United Kingdom or by a permanent establishment situated in the United Kingdom, and the individual is a member or beneficiary of, or participant in, a pension scheme established in the United Kingdom,
(i) contributions paid by or on behalf of that individual to the pension scheme during that period that he exercises the employment in the United Kingdom, and that are attributable to the employment, shall be deductible (or excludable) in computing his taxable income in the United States; and
(ii) any benefits accrued under the pension scheme, or contributions made to the pension scheme by or on behalf of the individual’s employer, during that period, and that are attributable to the employment, shall not be treated as part of the employee’s taxable income in computing his taxable income in the United States.
This paragraph shall apply only to the extent that the contributions or benefits qualify for tax relief in the United Kingdom.
Plain English example: You are a US citizen who lives in the UK and works for a UK employer. Your employer has a workplace pension scheme, which both you and the employer contribute to. Your contributions and your employer’s contributions to that pension aren’t taxable as income in the US.
On the face of it, this looks like a useful benefit – you don’t have to pay US income tax on your or your employer’s pension contributions! But wait, think about how this would work if you chose not to apply it (which you’re allowed to do):
- You include both your contributions and your employer’s contributions to your pension in the income on your US tax return.
- You’ve paid UK income tax on all your other income, at higher rates than the US (maybe 40% for income that’s only taxed at 12% in the US – simplified example, stay with me)
- You get a Foreign Tax Credit for all the UK income tax you paid.
- That FTC wipes out all your US income tax – you owe $0
- As far as the IRS is concerned, you’ve now “paid” income tax on those pension contributions, so you’ll never get taxed again on the contributions. Note that you do still pay tax on the growth, so it’s not quite like a Roth 401(k) – I go into more detail on how these withdrawals are taxed in this post.
This is one that’s very situation dependent and will depend on your overall financial & tax picture, but the example above is fairly typical. If you did elect to exclude the pension contributions from your US income, you’d still owe $0 to the IRS, but when you go to withdraw those pension contributions and the growth on them, that would all be taxable income. Sure, maybe you wouldn’t owe US tax then either, again because of the Foreign Tax Credits, but situations change – it might be better to lock in the tax-free nature now.
- Like everything in life, there’s no free lunch. The advantage to using the treaty and excluding the pension contributions is that you’ll have a larger Foreign Tax Credit to carryover to the next year, because you won’t use so much in offsetting your US tax. If you’re in the UK long term, you’ll probably have more FTC carryovers than you know what to do with, but this could be useful for some people or if you’re planning to move back to the US.
- Also, if you do elect to exclude your pension contributions, you need to tell the IRS directly by filing Form 8833 with your US tax return.
OK, on to sub-paragraph (b)…
(b) The reliefs available under this paragraph shall not exceed the reliefs that would be allowed by the United States to its residents for contributions to, or benefits accrued under, a generally corresponding pension scheme established in the United States.
Plain English: you can’t get more benefit from a UK pension that you would from a similar US account, like a 401(k). That means you’re limited to the lower contribution limits of the US 401(k), at $19,500 for 2021 plus $6,500 catch-up contributions if over 50, and $58,000 combined employer and employee contributions, instead of £40,000 per year. The UK lifetime cap and taper still apply.
Some more obscure US limits can also come in to play for highly compensated individuals (that is, you own more than 5% of the business or made more than $130,000) – if you’re in that situation, you’ll want to do some more research.
(c) For purposes of determining an individual’s eligibility to participate in and receive tax benefits with respect to a pension scheme established in the United States, contributions made to, or benefits accrued under, a pension scheme established in the United Kingdom shall be treated as contributions or benefits under a generally corresponding pension scheme established in the United States to the extent reliefs are available to the individual under this paragraph.
This paragraph mostly clarifies some of the limits above – the US will treat your UK pension contributions the way the US would treat 401(k) contributions, basically. There’s some nuance here, but that’s the gist of it.
(d) This paragraph shall not apply unless the competent authority of the Untied States has agreed that the pension scheme generally corresponds to a pension scheme established in the United States.
This is a good point to jump to the “Exchange of Notes” that is attached after the end of the treaty, because it calls out which pension schemes “generally correspond”. They are the ones in the note to sub-paragraph o) of paragraph 1 of Article 3 (General Definitions):
(a) under the law of the United Kingdom, employment-related arrangements (other than a social security scheme) approved as retirement benefit schemes for the purposes of Chapter I of Part XIV of the Income and Corporation Taxes Act 1988, and personal pension schemes approved under Chapter IV of Part XIV of that Act; and
(b) under the law of the United States, qualified plans under section 401(a) of the Internal Revenue Code, individual retirement plans (including individual retirement plans that are part of a simplified employee pension plan that satisfies section 408(k), individual retirement accounts, individual retirement annuities, section 408(p) accounts, and Roth IRAs under section 408A), section 403(a) qualified annuity plans, and section 403(b) plans.
I wanted to save you the pain of reading the “Income and Corporation Taxes Act 1988” and trace through which schemes are covered. However, that act was repealed and replaced by the Finance Act 2004. The treaty benefits will go to the successor plans, but confirming exactly which products are approved under these chapters is best left to a lawyer. By my understanding:
- Definitely included: workplace pensions, both defined benefit and defined contribution
- Maybe included: SIPPs
- Not included: ISAs
On the US side, it’s easier to trace these through, although still complicated. My list probably isn’t exhaustive, but includes:
- 401(a): Governmental, educational, and non-profit plans, roughly similar to a 401(k)
- The Thrift Savings Plan should fall under this too (it’s technically created by a separate piece of legislation, the Federal Employees Retirement System Act of 1986), but is treated as a trust under 401(a)). I have not come across any arguments that TSP isn’t a generally corresponding pension scheme.
- IRAs: Traditional, Roth, SEP, and SIMPLE
- Individual retirement annuities
- 403(a): These are qualified annuity plans that are fairly rare now, but they’re covered
- 403(b): Similar to a 401(k) but for schools and tax-exempt organization
If you have a different kind of “pension scheme” not mentioned above, I’d be interested to hear about it and see if we can confirm that we should add it to the list.
Article 24: Relief from Double Taxation
This is a long article, and a lot of it isn’t very relevant to typical Americans in the UK. The whole thing is specifically excluded from the Savings Clause, so it does apply to us, but I don’t happen to personally own an oil well 🙂
Some key takeaways:
- The US and UK are both required to offer Foreign Tax Credits, to avoid double taxation.
- There are some special rules specifically for US citizens in the UK but with US source income. This gets complicated, but the two key elements are:
- No double taxation
- The state of residence gets first dibs
- If you own a company or trust, there’s lots in here for you – take a look, and get advice if you need it
Article 25: Non-discrimination
Another long article without a lot of specific relevance to most Americans in the UK. Key points:
- The UK can’t tax US citizens who are resident in the UK any more severely than they tax UK citizens resident in the UK. Same with the US taxing UK citizens resident in the US.
- However, taxes can be different without being more burdensome – and we all know they are different!
- The same applies to deductions – they can’t be any worse, but they can be different
Article 26: Mutual Agreement Procedure
This one is basically a mechanism for resolving issues and problems related to the treaty. It’s probably nothing you’ll ever need to worry about, but it’s there if you need it.
9 thoughts on “The US/UK Tax Treaty”
I am sufficiently convinced by the consolidated treaty document and the technical explanation that SIPPs are covered by and treated as “personal pensions”. I am also sufficiently convinced that they are not somehow also treated as “trusts” as far as the treaty is concerned. After all, listed shares held in nominee accounts are actually held “in trust” by usually a chain of sub-trusts back to (usually) a bank that actually owes the share for you as a beneficiary only. Does that mean that all shares held at brokerages instead of in certificate form are trusts? I think not. There is one problem however, namely the dreaded “information reporting” IRS forms 3520 and 3520a. As reported by David Treitel (US/UK tax expert extraordinaire), tax treaties typically do not deal with what tax authorities can force you to *report*, as opposed to actually pay tax on. And failure to report can be even more dangerous in terms of potential fines for misfiling or under-reporting. The first page of the 2020 IRS form 3520-A instructions unfortunately point to “Rev. Proc. 2020-17, 2020-12 I.R.B. 539”, available at IRS.gov/irb/2020-12_IRB#REV-PROC-2020-17. This appears to help limit the scope of 3520/3520a reporting whilst at the same time ruling out virtually every non-US pension scheme, including the ones most comprehensively covered by the US/UK tax treaty (regarded as one of the best tax treaties). Every time I take a closer look at 3520/3520a to see if I could attempt to start filing these for a UK pension by brain explodes. I’m doubtful that this issue will ever be satisfactorily resolved, but my reasoning for not filing is thus: Proc 2020-17 is clearly trying to save IRS time by stopping kosher pension schemes already covered by treaties from causing reams of reports to be submitted that have absolutely no tax consequence, are already reported on FBAR and/or form 8938, and are going to be taxed anyway when the individual starts withdrawing their funds. I think everyone is waiting for seemingly esoteric (but extremely important) issues like this to be tested in court – but who would be willing to risk taking the IRS to court? That would end up being more expensive that hiring expensive dual registered CPAs and lawyers to file the damned forms anyway and/or pay whatever fines are charged. Other concerns I’ve had over UK pensions, especially SIPPs, is whether a US citizen in the UK can/must abide by all the UK contribution requirements or if they need to abide mutually by those of both countries. If you have no (or little) earnings in the UK, can you still contribute up to £3,600 gross to a pension? I don’t think there’s any concept in the US of contributing to a retirement fund from “non-earned” income. Also, what is the maximum annual contribution? Can we use the 401k limit to contribute to a SIPP, or are we forced to use the lower IRA contribution limit? At first glance the SIPP is much more equivalent to an IRA, but you can get Solo 401ks, 401ks can be converted to IRAs, UK employer pensions usually automatically become personal pensions when you leave an employer – so the waters are very muddied. My SIPP is the result of the merger of multiple historical employer, personal and stakeholder pensions, so what does that become? I want to believe that it is still covered by the treaty and it is overly cautious to file 3520/3520a. I think I’m more likely to make a mistake on these forms and cause myself bigger problems. As soon as I turn 55, I plan to withdraw funds from my SIPP (via fully US taxable UFPLS) at a rapid rate and move them to our ISAs for greater safety and longer term lower tax and/or future tax risk.
I tend to agree with you – I’m not comfortable enough in my interpretation to actually recommend it to anybody else, but I’m 90% convinced that SIPPs are pensions, not trusts. I’m equally convinced that employee contributions to workplace pensions that are greater than employer contributions are not trusts – if it was advantageous to me, I’d probably increase my contributions, but I’m in the fortunate boat that I’m confident I’ll have enough once I start hitting the withdrawal ages for pensions, TSP, IRA, etc. on my current path, but I’m a little worried about having enough between FIRE and hitting those ages. I’m looking at a Roth ladder from the TSP via a Traditional IRA as another option there, but avoiding any extra pension contributions that are even a little questionably problematic and going for S&S ISA instead makes sense.
You make a great point about the difference between needing to actually pay taxes vs report them. I’ve read that revenue procedure before, and it makes no sense at a conceptual level – lets simplify the requirements but exclude almost everything that we want to simplify! The potential penalties for not filing a 3520 are so absurdly high that they scare me a bit, too – if it was a matter of just having to file them if the IRS realizes that you haven’t, I’d be 100% in the camp of skipping them. The $10,000+ penalty makes me more leery, although realistically, I don’t see the IRS going after what must be hundreds or thousands of people who “might” be supposed to file these for vanilla pensions but aren’t.
Totally agree nobody is going to bother to take this to court – you’re better off waiting for the US to repeal citizenship based taxation altogether than for that court case.
The SIPP contribution limits is another one that’s clear as mud – the IRS and HMRC are nice enough to (mostly) say what types of accounts are “pension schemes”, but not which ones correspond to each other. The two systems just don’t line up nicely except workplace pensions vs 401(k)s and similar. You can rollover into 401(k)s as well as IRAs, including solo 401(k)s, so I don’t see that as a differentiator, either.
The logical, plain English interpretation would be that of course a SIPP is a pension, regardless of what you put in it – it’s even in the name! But I somehow don’t think that would hold up in court 🙂
Your SIPP withdrawal plan raises another question that I’d be interested in your opinion on. I agree with you that the UFPLS doesn’t have any special treatment in the US (I’ve seen arguments that lump sums aren’t US taxable, but they don’t add up to me). However, my understanding is that the US tax on the withdrawals from a pension (and we’ll assume a SIPP is a pension) would depend on how the contributions were taxed. If the contributions came from after-tax money (the default case, unless you elect to exclude employee and/or employer contributions from your taxable income based on the treaty), then the value would grow tax free and there’d be no tax on withdrawal, the same way a Roth 401(k) or IRA works.
Did you exclude the contributions from your income, so the withdrawal will be taxable? Or did you include them in your income, and are reading the situation differently from me?
Thanks for the insightful comment, it’s good to get a second set of eyes (aside from the invaluable inputs from David Treitel that helped me start to learn a lot of this, of course!).
I have always used the Foreign Earned Income Exclusion on wages and pension contributions, until a couple years ago when I realised it was advantageous to use FTCs (to get Additional Child Tax Credits for starters). Also, I just thought it was easier to use the FEIE. Contributions to pensions in the UK are not from after-tax money, even to a SIPP, because the SIPP provider adds basic rate tax relief to your contributions (received from HMRC) and you can claim any higher rate tax relief on your self-assessment form. So I don’t think I have any options regarding taking the money out – it will all be taxable. If I was starting a brand new employer pension or SIPP would I do things differently? Perhaps, I would need to do some more research. I can’t go back now and change things. I’ve been filing US tax returns on my UK income since about 1996. I think every year I find out there’s something I’m doing wrong or could do better. I’ve never gone back to amend things, I just do the best that is humanly possible at the time. So yes, I think we are on the same page – it might have been better to have declared all my pension contributions as taxable income on my US return at the time, but it’s too late now. I’m soon going to have no earned income, so it’s all rather academic now. Yes, the gap between FI and pension access age is always going to be a challenge. I always thought I was going to have to run down my ISAs to do it, but we now have enough sustainable cashflow from the ISAs, and the rare ability to access a DB pension at age 50, that we can still re-invest most or all of my dividends for now.
If you are interested in FI and travelling, you might already have found the Go Curry Cracker website: https://www.gocurrycracker.com/start-here. I like his “Never Pay Taxes Again” methodology of using the lower tax rates of qualified dividends and long term capital gains as much as possible, not least because it is also US/UK tax treaty friendly. He has a nice tool for seeing what tax rate you might fall into: https://www.gocurrycracker.com/federal-income-tax-calculator.
Another good one is Retire Before Dad (Craig or RBD): https://www.retirebeforedad.com/retire-before-dad-story. I don’t follow ChooseFI now, but RBD did a great podcast interview about using dividends for passive income: https://www.choosefi.com/dividend-investing.
Finally, I really subscribe to the views of Ed Slott about the downsides of putting too much money into tax-deferred accounts: https://www.fool.com/podcasts/answers/2021-03-09-protect-your-retirement-accounts. I used to think I would spend my SIPP last (or pass it to the kids IHT free), but I now plan to withdraw it to our ISAs as efficiently and quickly as possible.
First off, thank you for putting together and maintaining this blog. It’s been a godsend.
I had a question about what you were saying on Article 18 paragraph 5a. That paragraph states that contributions to UK employer pensions are untaxed by the US. You said that I might want to choose to forego this protection. While doing so would incur US tax liability on the contributions, said liability may get wiped out by the foreign tax credits I gain by paying my UK taxes. I understand so far. But then you say “as far as the IRS is concerned, you’ve now “paid” income tax on those pension contributions, so you’ll never get taxed again, like a Roth 401(k).” I didn’t really see how this follows from the treaty’s language. If you have the time, could you please connect the dots?
Good spot – I actually wrote another post more recently that dives into how the US taxes UK pension withdrawals: http://fireacrossthepond.com/2021/05/26/tax-on-uk-pension-withdrawals/
My previous statement that it’s like a Roth 401(k) wasn’t entirely accurate, I’ve updated the US/UK Tax Treaty post to reflect that and link to the updated post, thanks for pointing it out. In short, the contributions aren’t taxed any further (they’re post-tax basis, just like in a taxable account), but the growth is only tax-deferred, like in a Traditional 401(k). Still a good deal, and a present exchange rates and tax rates the US tax on the growth is still likely to be fully offset by the UK tax on 75% of a withdrawal (since 25% is tax free), but it’s important nuance.
LikeLiked by 1 person