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HMRC internal manual

International Manual

Double Taxation applications and claims - applicants/claimants: pension funds: Claims under ICTA88/S614(5)

Some pension funds qualify under ICTA/S615(3) to make claims for relief from UK tax under ICTA88/S614(5). The status of such schemes is determined by Specialist Personal Tax, Pension Schemes Services (formerly Pension Schemes Office).

Pension funds of this type are controlled by trustees in the UK, but relate to employment which was carried out wholly outside the UK. The pensioners themselves were resident outside the UK during their employment, and generally remain so in their retirement.

The relief available under ICTA/S614(5) is restricted to that available on the grounds of non-residence in the UK, and does not therefore extend to income relievable only under the terms of a double taxation treaty.

For practical purposes, this means that we would only be able to process a claim in respect of UK government “FOTRA” (“Free Of Tax to Residents Abroad”) securities or foreign dividends or interest. However as explained in INTM368030, registered holders of FOTRA securities receive interest without deduction of UK Income Tax, unless they have asked for tax to be deducted. INTM368280 explains that UK paying and collecting agents are not required to deduct UK Income Tax when paying or collecting foreign dividends or interest. In any case of doubt or difficulty, refer the claim or correspondence to CTIAA Business International, Business DTR Technical Support Group before processing it.