International treaty

Pensions under the UK and Luxembourg Double Taxation Convention

Updated 27 March 2026

Background

The UK and Luxembourg signed a Double Taxation convention on 7 June 2022 (‘the 2022 convention’). That convention is now in force and took effect for all pension income received on or after 1 January 2024. It replaced a convention with Luxembourg which was signed in 1967 (‘the 1967 convention’).

The 2022 convention changes the way that government non-government service pensions are taxed. It means that such pensions which were taxable only in Luxembourg are now taxable in the UK from 1 January 2024 (and vice versa).

However, the 2022 convention includes a provision which allows individuals to choose whether they want the new 2022 or previous 1967 convention to apply to their pension income. This choice — or ‘election’ — must be made no later than 23 November 2026.

Pensions

Under the 1967 convention, most pensions, with the exception of government service pensions, were taxed only in the country the recipient was resident. However, from 1 January 2024, such pensions are now also taxable in the country that pays it under the 2022 convention. This includes most private, occupational and social security pensions.

For example — A UK pension paid to a resident of Luxembourg was previously exempt from UK tax, as it was taxable only in Luxembourg. However, the same pension is now taxable in the UK from 1 January 2024.

This will apply unless you inform HMRC that you elect for the 1967 convention to continue to apply. This election must be made no later than 23 November 2026. It is also permanent and cannot be revoked at any time.

Government service pensions

Such pensions remain taxable only in the country paying the pension under the 2022 convention. However, from 1 January 2024, these pensions may be exempt from tax in the paying country (and taxable only in the country of residence), if the recipient is a national and resident of the other country.

For example — A UK Armed Forces pension paid to a person who is a resident and a national of Luxembourg, was previously exempt from tax in Luxembourg. From 1 January 2024, this same pension will now be taxed only in Luxembourg (and is exempt from UK tax).

This will apply unless you inform HMRC that you elect for the 1967 convention to continue to apply to the government service pension. This election must be made no later than 23 November 2026. It is also permanent and cannot be revoked at any time.

Please note that UK government service pensions do not include NHS pensions or the UK National Insurance pension (the State Pension) under either the 1967 or 2022 convention — A non-exhaustive list of UK government / non-governmental pensions can be found in HMRC guidance at INTM343040.

What you need to do

You can only make an election if:

• you were already receiving your pension payments before 23 November 2023, and
• you were already resident in the country that was not making those pension payments before 23 November 2023

So, to make an election in respect of a UK pension, a person must have been receiving that pension before 23 November 2023 and must also have been resident in Luxembourg before that date.

You only need to make an election if you do not want your pension to be taxed in the country that pays it after 1 January 2024. Or if you receive a government service pension from one country, you are a national and resident of the other country, and you do not want it to be taxed in that other country.

If so, you must send your election to the tax authority of the country that is paying the pension. So, if your pension is paid by the UK, you must make an election to HMRC. You must make your election no later than 23 November 2026.

Your election will apply retrospectively to all pension payments received from 1 January 2024. So, if you make an election on 1 May 2026, it will apply to all pension payments you receive from 1 January 2024 onwards.

How to make an election

Your election must be in writing and should state:

‘I elect for my pension to be taxed in accordance with the 1967 Double Taxation convention between the UK and Luxembourg. I understand that this election will apply from 1 January 2024 and cannot be revoked at any time.’

You should also provide the following information within your election:

• full name and address
• your UK Unique Taxpayer Reference (UTR) or National Insurance Number, along with your Luxembourg tax reference
• the name and amounts of the pensions you received
• certificate of tax residence in the UK or Luxembourg, and
• if required, proof of your nationality in the case of government service pensions

Elections made to HMRC will automatically be shared with the Luxembourg Tax Authority (and vice versa).

Where to send your election

If your pension is paid by the UK, you should send your election to:

PAYE Self-Assessment
HM Revenue & Customs
United Kingdom
BX9 1AS

If your pension is paid by Luxembourg, you should send your election to:

Administration des contributions directes (ACD)
Division des relations internationales
33, rue de Gasperich, L‑2982
Luxembourg
Email: divrelint@co.etat.lu