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Since transfers or direct rollovers from US IRAs are only allowed to be rolled over to IRS qualified plans foreign pension plans are not governed by the U.S. Tax Code, they cannot be classified as qualified trusts. Accordingly, amounts from these plans cannot be rolled over to any of the retirement accounts not in the country that governs them.
This means that what you will really be doing is a Lump Sum distribution from the US IRA. The US-UK tax treaty does cover this subject. Article 17 of the treaty deals with pensions. Since the IRA was generated with money from a 401K it would fall under pensions for tax treaty determination.
Under the previous treaty, a lump-sum payment from a pension scheme was taxable only in the country of residence. So if an individual moved from the US to the UK before receiving a lump sum from a US pension scheme, they would be taxable on the lump sum neither in the US (because of the treaty) nor in the UK (which does not tax lump sums anyway).
The treaty was changed and now the individual will only be taxed in the country where they are resident at time of distribution.
The withholding of the taxes in the US would be the real problem. Could the W8 form cover this with the understanding that you are requesting no withholding based on Tax Treaty provisions under Article 17? Here is a link to the W8 Form:
Part II of the W8 allows you to fill in the treaty information that allows for no withholding.
The IRA administrator would keep this to show the reason for not withholding the taxes. If they will not then you would still need to file a 1040NR and use the Article 17 Treaty to request your withholding back from the US.
Your situation is complicated, it is only recently that treaties were changed to allow for contribution deductions when made in a foreign country by a resident.
I sincerely XXXXX XXXXX is helpful,