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HMRC internal manual

International Manual

DT Agreements: South Africa - Income from a UK source paid to a resident of South Africa

UK pensions and annuities paid to a resident of South Africa

From 6 April 2003: Article 17 of the 2002 Convention

Full relief from UK tax is available for

  • pensions in consideration of past employment
  • annuities

paid to a resident of South Africa.

Before 6 April 2003: Article 16 of the 1969 Convention

There is a ‘subject to tax’ condition. Pensions received by South Africanresidents for services rendered outside South Africa are exempt from tax there. However,where a person rendered services within South Africa for at least two out of the ten yearsimmediately before retirement, a portion of the pension that relates to services renderedwithin South Africa will be taxable there. It is understood that this exemption is underreview by the South African taxation authorities.

South African tax is only charged on the proportion of the pension which was earned fromservice in South Africa. Relief under the 1969 Convention is available only on thatproportion.

The exemption from South African tax does not apply to annuities from retirementannuity funds that are not linked to consideration for past employment, so fullrelief from UK income tax is available.