Hi I have been searching online for a while and really hope this group will help me find the answer. I was working in the US at the beginning of this year (2006) on a work permit( H1 B visa) . I lived there for exactly 182 days and left the US on July 1st to move to the UK where I started work on July 17th. I am on a spouse settlement visa in the UK which made me eligible to work. I am planning to move all my bank balances, 401K retirement money etc in the USA to UK ( I need the money!) . The 401K customer service rep told me that I could fill in a form by which I would not be taxed the 30% on early withdrawal or the
10% penalty by virtue of me living in a foregin country ( foreign beneficiary).
Now, my questions is - does it mean I can get the 401K money without paying tax at all ? Will I have to pay tax on this transaction in the UK ? If so, am I better off being taxed/penalized in the US instead of being taxed in the UK ? Also, I am not certain if I am considered a UK resident and hence, will be a non-resident alien by US tax terms , or if I am still a US resident alien by virtue of the substantial presence test ( which I believe is just 183 days counting days in 2006 + 1/3rd from 2005 and 1/6th from 2004). I hope I am not making wrong assumptions.
I will be so happy with a clarification to my questions .
Regards, Ranga