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HMRC internal manual

International Manual

UK residents with foreign income or gains: income arising abroad: Government pensions

The government services Article also deals with pensions paid by, or paid out of funds created by, the state, political sub-division or local authority in respect of services rendered to that state etc. (INTM163190). Such pensions paid to an individual who is a resident of the UK are normally exempt from UK tax except where

  1. the pension is paid in respect of services rendered in connection with any business carried on by the state etc, or
  2. the individual is a UK national or, in some agreements, is ordinarily resident in the UK.

Refer to the text of the Article in the relevant agreement to see whether exemption is available for government etc pensions and, if so, what the conditions for exemption are in order to ensure that they are fulfilled.