Hello,
We are moving to the UK from the US and are trying to figure out what do do with our 529 accounts. We have approximately $80k for each child. We are considering two main options: 1) simply withdrawing and paying the tax and penalties before we leave the US, reducing the effective annual rate of return on these investments from ~5% to ~2.5%; 2) transferring the 529s to a US relative to hold until the kids go to university in the UK. I've reviewed the useful threads on 529s on this site but still have some questions.
Does anyone have experience of practically using 529 plans to pay for education in the UK? How easy/difficult is the process? Are there tax implications to be aware of at point that the funds are used? In particular, I read an article from a financial planning firm that says: A UK resident for whom a 529 plan pays an expense is likely to be taxed on the income and gains in such a distribution. See: https://creativeplanning.com/internatio ... in-the-uk/. Does this mean if the student claims $20,000 in educational expenses in a UK tax year, the capital gains on that amount will be taxed?
Thank you for any info you can provide.
We are moving to the UK from the US and are trying to figure out what do do with our 529 accounts. We have approximately $80k for each child. We are considering two main options: 1) simply withdrawing and paying the tax and penalties before we leave the US, reducing the effective annual rate of return on these investments from ~5% to ~2.5%; 2) transferring the 529s to a US relative to hold until the kids go to university in the UK. I've reviewed the useful threads on 529s on this site but still have some questions.
Does anyone have experience of practically using 529 plans to pay for education in the UK? How easy/difficult is the process? Are there tax implications to be aware of at point that the funds are used? In particular, I read an article from a financial planning firm that says: A UK resident for whom a 529 plan pays an expense is likely to be taxed on the income and gains in such a distribution. See: https://creativeplanning.com/internatio ... in-the-uk/. Does this mean if the student claims $20,000 in educational expenses in a UK tax year, the capital gains on that amount will be taxed?
Thank you for any info you can provide.
Statistics: Posted by tonimann — Sun Mar 17, 2024 8:50 am — Replies 0 — Views 35