RPSM13101540 - Technical Pages: International: Double taxation agreement relief: Double taxation agreements

Double taxation agreements

The conditions that have to be met in order that contributions to an overseas pension scheme qualify for UK tax relief are specified in the applicable double taxation agreement (DTA). The list below shows the DTAs and articles that contain a pension contributions relief provision, together with the relevant Statutory Instrument references.

Canada - Article 27(2) - SI 2003 No.2619

Chile - Article 17 - SI 2003 No.3200

Denmark - Article 28 - SI 1996 No.3165

France - Article 25(8) - SI 1987 No.2055

Ireland - Article 17A - SI 1995 No.764

Moldova - Article 17 SI 2008 No.1795

Slovenia - Article 26(6) - SI 2008 No.1796

South Africa - Article 17(3) - SI 2002 No.3138

Switzerland - Article 18 - SI 2008 No.3465

USA - Article 18 - SI 2002 No.2848

There is some guidance on the terms of a particular article in the part of the Double Taxation Relief Manual that deals with the agreement concerned. A procedural guidance note on the relief provisions for contributions to US pension schemes in the UK/USA DTA was also made available on 2 February 2007 as an attachment to Pensions Tax Simplification Newsletter No 24 on the HMRC internet site (via “pension schemes” and “news” hyperlink).

The conditions in pension contributions relief articles vary from DTA to DTA, but include the following:

1. The scheme is tax-recognised in the other country,
2. The scheme is accepted by HMRC as corresponding to a UK tax-recognised pension scheme.

Pension contributions relief articles may also include one or more other conditions, such as:

i. the individual was contributing to (or was a member of) the scheme before becoming a UK resident (or before beginning employment in the UK),

ii. the individual was not a resident of the UK immediately before beginning employment in the UK,

iii. the individual is employed in the UK by the person who was his employer immediately before beginning employment in the UK.