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HMRC internal manual

International Manual

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HM Revenue & Customs
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DT Agreements: France - Income from a UK source paid to a resident of France: UK Government pensions paid to a resident of France

Pension paid on or after 6 April 2010

Under the current (2009) UK/France DTC, which applies to income paid on or after 6 April 2010, full relief for government and local authority pensions is available only where the individual is a national and resident of France, without also being a UK national. Otherwise, no relief from UK tax is available under the DTC.

Pension paid before 6 April 2010

No relief from UK tax is available for a UK government pension (including a local authority pension) paid to any individual resident in France. See Article 19(1)(a) of the 1968 DTA.

Even where a UK government pension is paid to an individual who is both a resident and national of France, there is no relief from UK tax under the 1968 DTA. The wording of the treaty is complex, and results in the following chain of reasoning:

  • Generally, a pension from a UK source is taxed solely in the State of residence (France) under

    Article 18, but Article 18 is disapplied for a UK government pension that is within Article 19.

     

  • Article 19(1)(a) gives taxing rights on government pensions solely to the source State (UK), but

    sub-paragraph (1)(a) is disapplied by Article 19(1)(b) if the individual is a French national without also being a UK national.

     

  • Although the UK’s sole taxing rights are disapplied, the pension is still within Article 19 and we cannot revert to Article 18.

This means that for UK government pensions falling within the provisions of Article 19(1)(b), both the UK and France will have taxing rights. Article 19(1)(b) provides for a UK government pension to be treated for the purposes of Article 24 as income from a source within the UK (for French taxation purposes). The income falls to be treated under Article 24(b) and is a matter for the taxation authorities of France. You should not comment on the potential liability to French tax of any resident of France.