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Posted Fri, 24 Nov 2023 10:42:02 GMT by
Planning on moving to Portugal next year with Portuguese wife. I have a UK LOCAL government pension. I understand that UK Government pensions are always taxed here in the UK. Does this also apply to LOCAL government pensions? If yes will my State Retirement Pension (SRP) be taken into account when assessing tax payable on my LOCAL government pension here in the UK as I understand that I will have to pay tax on my SRP in Portugal yes? The NHP scheme in Portugal that I would have benefitted from is it seems about to be ended.
Posted Tue, 28 Nov 2023 09:34:18 GMT by HMRC Admin 5 Response
Hi

Per Article 18 of the UK/Portugal Double Taxation treaty

'Remuneration or pensions paid out of public funds of the United Kingdom or Northern Ireland or of the funds of any local authority in the United Kingdom to any individual in respect of services rendered to the Government of the United Kingdom or Northern Ireland or a local authority in the United Kingdom in the discharge of functions of a governmental nature, shall be taxable only in the United Kingdom'.

Your local government pension will therefore be taxable only in the UK. As regards your UK State Pension, it will be relievable under the 'Other Income' article if 'subject to tax' in Portugal, and will therefore not be taken into account when assessing the UK tax payable on your local government pension.                                          
Please see UK/PORTUGAL INCOME TAX CONVENTION SIGNED 27 MARCH 1968

Thank you

 

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