What is a double taxation agreement and how does it apply to pensions?

A double taxation agreement (DTA) is a bilateral treaty between two countries that determines which country has the right to tax specific types of income. For pension income, DTAs typically contain an article (often Article 17 or 18) that assigns taxing rights — either exclusively to the country of residence, exclusively to the UK, or, less commonly, to both countries with a credit mechanism.

How do I claim DTA relief on my UK pension?

You need to complete HMRC Form DT Individual (or the country-specific version), which must be certified by the tax authority in your country of residence. Once certified, the form is submitted to HMRC, who issue an NT (No Tax) code to your pension provider instructing them to pay your pension gross — without deducting UK income tax at source. You then declare the income in your country of residence.

What is the difference between private and government pensions for DTA purposes?

Most DTAs distinguish between private pensions (defined contribution, SIPP, personal pension, employer scheme pensions) and government or civil service pensions (paid in respect of employment by the UK Government or a local authority). Government pensions are almost universally taxed only in the UK, regardless of where you live, with limited exceptions for nationals of the residence country who are also nationals of that country.

Does the DTA treatment apply to the UK State Pension?

Yes. The UK State Pension is treated as a pension for DTA purposes and the same principles apply. However, the administrative process differs slightly — HMRC must direct the Department for Work and Pensions (DWP) to pay the State Pension gross rather than issuing an NT code to a private pension provider. In some countries, the State Pension is taxable in the residence country; in others (notably where State Pensions are frozen), there are additional complexities.

What happens if I move to a country with no DTA with the UK?

If you are resident in a country that has no DTA with the UK, your UK pension income will generally be subject to UK income tax at source in the normal way. You may also face tax on the same income in your country of residence, with a unilateral credit available in some jurisdictions. The UK does allow a unilateral double taxation relief credit in some circumstances, but the position is less favourable than under a DTA. Professional advice is particularly important in this scenario.

UK Tax Treaties and Pension Income: The Complete Country-by-Country Reference

When a UK expat receives income from a UK pension — a SIPP, a workplace defined contribution scheme, a defined benefit pension, or the UK State Pension — the default UK position is that the income is subject to UK income tax. Without any further action, the pension provider will deduct income tax at source, and the recipient may also face tax in their country of residence on the same income.

Double taxation agreements (DTAs) — bilateral treaties negotiated between the UK and individual countries — exist specifically to prevent this double taxation. They assign the right to tax pension income to one country (or in some cases both, with a credit mechanism), and they provide a process by which the income can be received gross by the recipient, with tax paid only once.

Understanding which country has taxing rights, and then implementing the correct relief, is one of the most important — and most frequently neglected — aspects of expat pension planning.

How DTA Pension Articles Work

DTAs are structured around articles, each covering a specific type of income. Pension income is typically addressed in Article 17 (pensions and annuities) and Article 18 or 19 (government service pensions). The precise article numbers and wording vary between treaties, but the practical outcomes fall into three categories:

Outcome 1: Exclusive Residence Country Taxation

The most common outcome for private pensions under UK DTAs. The DTA grants exclusive taxing rights to the country in which the recipient is resident. The UK has no right to tax the pension income. The recipient must declare it in their country of residence and pay local income tax there.

To access this treatment, the recipient must obtain a NT (No Tax) code from HMRC, which instructs the pension provider to pay the pension gross, without UK tax deduction.

Outcome 2: Exclusive UK Taxation

Almost universal for government and civil service pensions — pensions paid in respect of services rendered to the UK Government, a UK local authority, or a UK Government agency. Even if the recipient is resident outside the UK, the UK retains exclusive taxing rights. These pensions will have UK income tax deducted at source and cannot be paid gross to a non-UK resident.

The exception is where the recipient is both a national and a resident of the other contracting country — some DTAs provide that in this circumstance, the pension falls under the residence country taxation rule.

Outcome 3: Shared Taxing Rights With a Credit Mechanism

Less common, but found in some older treaties or where the DTA text is less precise. Both countries may tax the income, but the residence country must give a credit for tax paid in the UK (or vice versa). In practice this usually results in the recipient paying tax at the higher of the two countries' rates. Where this applies, the NT code mechanism may not be available.

The NT Code Process

For pension income that qualifies for exclusive residence country taxation, the process to access relief is:

Obtain Form DT Individual from HMRC (available on the HMRC website). This is the standard form for most countries. Some countries have country-specific versions.
Complete Part A of the form (your details and the details of the pension).
Submit to the tax authority in your country of residence for certification — they confirm that you are resident there for tax purposes and entitled to treaty relief.
Return the certified form to HMRC (address specified on the form).
HMRC review and issue an NT (No Tax) code to your pension provider. The provider then pays your pension gross.
You declare the income in your country of residence and pay local income tax in accordance with that country's rules.

The process typically takes six to twelve weeks from submission to HMRC to the NT code being implemented by the pension provider. Interim overpaid UK tax can be reclaimed via a Self-Assessment return or an R43 form.

NT codes require renewal if you move country, and may need to be refreshed if HMRC's records become stale. We manage this process on behalf of clients.

Country-by-Country DTA Treatment

The following sets out our understanding of the DTA treatment for the principal countries in which our clients are resident, as of June 2026. DTA terms can change and HMRC guidance evolves — always verify the current position with a tax professional before taking action.

Spain

DTA: UK-Spain DTA (2013, in force from 2014).

Private pensions: Taxed exclusively in Spain for Spanish tax residents. NT code available from HMRC. Spanish income tax rates apply (general scale, 19–47%).

Government pensions: Taxed in the UK. Spain does not tax these. UK tax deducted at source.

State Pension: Taxed in Spain under the residence country rule. NT code mechanism used (via DWP instruction from HMRC).

Notes: Spain also operates a Beckham Law regime for certain qualifying new arrivals — a flat 24% rate on Spanish income for up to six years. This does not override the DTA treatment of UK pension income (which is taxed in Spain under the DTA regardless), but it may affect the rate at which that income is taxed if the individual qualifies for the regime. Specialist Spanish tax advice recommended.

Cyprus

DTA: UK-Cyprus DTA (1974, as amended). One of the older treaties still in force.

Private pensions: The Cyprus DTA contains an unusual provision. A pension from a UK source paid to a Cyprus resident is taxed in Cyprus — but Cyprus offers a flat rate option: 5% on foreign pension income above €5,000 per year (this threshold rose from €3,420 to €5,000 under the 2026 Cyprus tax reform; confirm the current figure). This makes Cyprus particularly tax-efficient for UK pension drawdown compared to the graduated UK or mainland European income tax rates.