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HMRC internal manual

Employment Income Manual

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HM Revenue & Customs
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Certain overseas government pensions paid in the United Kingdom

Section 615 ITEPA 2003

The governments of certain overseas territories may pay pensions in the United Kingdom through any public department, officer or agent. These are chargeable to income tax by virtue of Section 615 ITEPA 2003 and not under Section 573 ITEPA 2003 like other foreign pensions.

Certain conditions apply. The pension:

  • must be paid to a person who has been employed in overseas government service, or
  • to the widow, widower, surviving civil partner, child, relative or dependant of a person who has been employed in overseas government service and
  • must be payable in respect of that service.

The pension must also be payable in the United Kingdom to a United Kingdom resident by or on behalf of the government of:

  • any country forming part of Her Majesty’s dominions
  • any other country mentioned in Schedule 3, British Nationality Act 1981 (these are listed in a footnote to Section 320 ICTA 1988)
  • any territory under Her Majesty’s protection.

Pensions that are payable out of the public revenue of the United Kingdom or of Northern Ireland are not chargeable under Section 615 but will be chargeable as United Kingdom pensions under Section 569 ITEPA 2003 or as pensions under registered pension schemes under Section 579A ITEPA 2003.

Overseas government service

Overseas government service refers to persons employed outside the United Kingdom in the service of the Crown or of one of the countries or territories listed below.

Her Majesty’s dominions

The Dependant Territories are:

Anguilla, Bermuda, British Antarctic Territory, British Indian Ocean Territory, British Virgin Islands, Cayman Islands, Falkland Islands, Gibraltar, Montserrat, Pitcairn, Henderson, Ducie and Oeno Islands, St Helena, St Helena Dependencies (Ascension Island, Tristan da Cunha), South Georgia and South Sandwich Islands, Turks and Caicos Islands

Countries listed in Schedule 3 BNA 1981

Antigua and Barbuda, Australia, The Bahamas, Bangladesh, Barbados, Belize, Botswana, Brunei, Canada, Republic of Cyprus, Dominica, Fiji, The Gambia, Ghana, Grenada, Guyana, India, Jamaica, Kenya, Kiribati, Lesotho, Malawi, Malaysia, Maldives, Malta, Mauritius, Namibia, Nauru, New Zealand, Nigeria, Pakistan, Papua New Guinea, Saint Christopher and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Seychelles, Sierra Leone, Singapore, Solomon Islands, South Africa, Sri Lanka, Swaziland, Tanzania, Tonga, Trinidad and Tobago, Tuvalu, Uganda, Vanuatu, Western Samoa, Zambia, Zimbabwe.

Territories under Her Majesty’s protection

There are no longer any protectorates or protected states.

Further information

Most pensions charged by Section 615 are dealt with by Public Departments and any questions about liability should be referred in the first instance to Public Departments (London).

Deduction allowed from pension income taxable under Section 615

Where Section 615 applies, Section 617 ITEPA 2003 provides for a special deduction of 10% from the full amount of the pension accruing in the tax year.