US government pension

My spouse (dual US/UK citizen) and I are contemplating moving to the UK after I retire. I plan to enter the UK on a spouse visa and at some point take on residency. My retirement will be a pension from the US government (military pension, not social security). I was reading the tax agreement and it seems to me that pensions from the government are only taxed by the government that pays out the pension, though I could be wrong in how I interpreted the agreement. Article 19, Goverment Service, states in sections 2a and b, “any pension paid by, or out of funds created by, a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall, subject to the provisions of sub-paragraph b) of this paragraph, be taxable only in that State; b) such pension, however, shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that State. Would my pension be subject to a dual tax by the both UK and US or is it dependent upon my visa/residency status in the UK?

Hi
HMRC cannot comment on future events as legislation and/or plans may change. However, based on current guidance the pension would only be taxable in the UK if you were a national and a resident.

Thank you for the reply. I'm guessing the for purposes of the agreement, the term "Contracting State" means the UK in this particular case? As well, does permanent residency differ from national for the purposes of this tax agreement (based on current legislation), and would permanent residency avoid double taxation by the UK and US?

Hi,

Please refer to Article 3 for the full context.

Uk/USA Double Taxation Agreement - 2002

Thank you.