Is my 401(k) taxed by the UK after I move?

Your 401(k), IRA, and Roth continue to exist and stay under US rules, while the UK also has rules for foreign pensions once you are resident. The US–UK treaty is what coordinates the two so the same money is not simply taxed twice. Exactly how a given withdrawal is treated depends on the account and the treaty article that applies, which is fact-specific. (Source: US–UK Income Tax Convention (2001), Article 17 (rule module treaty/pensions-17@1.0.0).)

Is the UK 25% tax-free pension lump sum also tax-free in the US?

This is genuinely contested. There are two readings of the US–UK treaty on whether the UK's 25% tax-free lump sum keeps that treatment for US tax purposes, and they lead to different answers. Two Shores models both readings side by side and does not pick one; this is a question to settle with a cross-border professional, and pending independent review here. (Source: US–UK Income Tax Convention (2001), Article 17(2) and Article 1 saving clause; both readings modeled in treaty/pensions-17@1.0.0.)

Field Guide

What Happens to Your 401(k) and Pensions When You Move to the UK

Rules as of 2026-07-04 · treaty/pensions-17@1.0.0

Field Guide · Two Shores · twoshores.app

Educational information, not tax or investment advice. Rules described as of the 2026 tax year; always confirm current law or consult a professional for your situation.

One of the first fears people have when moving from the US to the UK is that their retirement savings will be stranded, double-taxed, or forced out. The reassuring part first: your 401(k), IRA, and Roth do not disappear, and you do not have to cash them out to leave. The careful part: two tax systems now have a claim on the same accounts, and how they fit together is governed by the US–UK treaty rather than by either country alone.

Does the US keep taxing my retirement accounts?

Yes. The US taxes its citizens and green card holders on worldwide income wherever they live, so your US retirement accounts stay inside the US system after you move. What changes is that the UK also has rules for pensions once you are UK-resident, and the US–UK Income Tax Convention (2001), Article 17 is what stops the two systems from simply taxing the same money twice. The mechanics differ by account type and by which part of Article 17 applies, so this is a shape, not a single answer.

Where does the treaty do the heavy lifting?

The treaty's pensions article is the pivot. It addresses which country may tax periodic pension payments, how cross-border contributions and accruals are treated, and how the two systems give credit so that relief is not lost. Because the exact wording and its scope carry real consequences, Two Shores treats the article as a cited data point and defers to it rather than paraphrasing an outcome.

The one genuinely contested question: the 25% lump sum

The UK lets many people take 25% of a pension as a tax-free lump sum. Whether that amount is also free of US tax is one of the best-known open questions in the corridor. There are two defensible readings of the treaty, and they disagree. Two Shores models both readings, marks the question as contested, and endorses neither, because picking a side would be exactly the kind of tax substance this product refuses to invent. This is a question to resolve with a professional for your specific pension.

What people in this position usually do

Without prescribing anything, people moving with US retirement accounts tend to: confirm their residence position first (which decides which year the UK rules start to bite), map each account to how the treaty treats it, and get one-time professional input on the lump-sum question before doing anything irreversible with a pension.

The US to UK Move Playbook puts your accounts on a timeline and shows both readings of the contested points with citations. See also how the UK decides if you are tax-resident.

Common questions

Is my 401(k) taxed by the UK after I move?: Your 401(k), IRA, and Roth continue to exist and stay under US rules, while the UK also has rules for foreign pensions once you are resident. The US–UK treaty is what coordinates the two so the same money is not simply taxed twice. Exactly how a given withdrawal is treated depends on the account and the treaty article that applies, which is fact-specific.Source: US–UK Income Tax Convention (2001), Article 17 (rule module treaty/pensions-17@1.0.0)
Is the UK 25% tax-free pension lump sum also tax-free in the US?: This is genuinely contested. There are two readings of the US–UK treaty on whether the UK's 25% tax-free lump sum keeps that treatment for US tax purposes, and they lead to different answers. Two Shores models both readings side by side and does not pick one; this is a question to settle with a cross-border professional, and pending independent review here.Source: US–UK Income Tax Convention (2001), Article 17(2) and Article 1 saving clause; both readings modeled in treaty/pensions-17@1.0.0