Madanxpat

Dear members, I am new to this forum.

I am UK citizen, 76, retired Engineer. I wish to settle in India. Could anyone elaborate on whether UK state pension given by Pension Service is specified as UK Government Pension? This pension is earned because of my NI contribution throughout my working life in UK. UK Pension Service is a Government Department.

GTA treaty UK-India Article 19-2 states that:"Any pension paid by the Government of a Contracting State to any individual in respect of services rendered to that Government shall be taxable only in that Contracting State."

Article 20 - 1 states that: "Pensions and annuities - 1. Any pension, other than a pension referred to in Article 19(2) of this Convention, or annuity paid to a resident of a Contracting State shall be taxable only in that State."

Which category does the UK state pension fall into? As in Article 19-2, Is it only taxable in UK? Or as in Article 20-1, is it taxable in the country of residence i.e. India?

In other words do I have to pay tax on my state pension in India?

Regards.

Madanxpat

quiltman

As a UK citizen your UK State Pension is not taxable if it is below the tax free allowance - currently £11000. If you have other UK sourced pensions/annuities, these are added to your state pension and if you are now above the TF allowance any tax due will either be taken from one of your other pensions OR you can do a self assessment each year and pay HMRC what you owe. There are Double Taxation Treaties in force for many countries whereby you only pay tax in one country and use that as an allowance against tax due where you are resident. Here's the link. you need to go to page 21 and read what is agreed between UK/India.
https://www.gov.uk/government/upload...n_Treaties.pdf
It appears that there is no relief on government pensions -they are taxed in UK, but there IS relief on the State pension. Definition of government pensions is here;
https://www.gov.uk/hmrc-internal-man...ual/intm343040

so my initial reading is no tax on your UK State Pension but you have to check with the Indian Revenue whether they will tax you on it in India. For example, here in Philippines on the visa we have, we get exemption from local income tax on all monies remitted here.

quiltman

Oh, forgot to say, welcome to BE!

Red Eric

The UK state pension is not the same as a pension paid in respect of services to the state. The latter are public sector superannuation scheme pensions (eg civil service or local authority pensions) and they are only taxed by the paying state.

The state pension is taxed in the country of residence.