If you live abroad and receive a UK pension, the short answer is that UK pension income is taxable in the UK under domestic law, but a double tax treaty often gives the right to tax it to the country where you live instead. Whether you pay UK tax, local tax or both depends on the type of pension, your country of residence and whether you have claimed treaty relief. This guide explains how it works and how to stop UK tax being deducted when it shouldn’t be.
If you are planning to leave the UK, our tax advice when leaving the UK page explains the wider picture.
The taxation of pension income while abroad is complex and we recommend that your position is professionally assessed. If you would like to discuss the UK tax on your pension income while abroad, please contact Expat Tax Solutions.
Key Takeaways
- UK pension income is taxable in the UK under domestic law whether or not you are UK resident, but a double tax treaty often gives the right to tax it to the country where you live, so the exact wording of the specific treaty should be checked.
- UK private and workplace pensions are paid under PAYE, so UK tax keeps being deducted until HMRC issues an NT code to your provider.
- The UK State Pension is paid gross, can fall under the disregarded income rules for non-residents (which means losing the personal allowance), and is often taxable only in your country of residence under a treaty.
- The £12,570 personal allowance (frozen for 2026/27) is not automatic for non-residents. UK nationals typically qualify, but many other nationals do not.
- To stop UK tax being deducted, apply for an NT code using Form DT-Individual, certified by your overseas tax authority or supported by the certificate of residence it issues instead.
- UK government service pensions are often taxable only in the UK, even if you live abroad.
- You may still need a UK tax return and Self Assessment helpsheet HS304 if you have other UK income or are claiming treaty relief.
Is UK Pension Income Taxable If You Are Non-Resident?
Under UK domestic law, pension income arising in the UK is taxable in the UK whether or not you are UK resident. Becoming non-resident does not switch that off. It is the double tax treaty between the UK and your new country that decides who gets to tax the income.
Your UK residence status matters at two levels. First, we consider your UK tax residence under UK domestic rules, which means the Statutory Residence Test. Second, the treaty looks at where you are resident for treaty purposes. Treaty residence comes second, because you can’t be treaty resident in a country unless you are resident there under its own domestic law. If you are domestically resident in both countries, the treaty tiebreaker rules decide which one you are resident in. If you are not domestically resident in either country, the treaty can’t help you, so you are unlikely to get relief from UK tax on your UK pension.
If you are unsure of your status, start with a residence assessment or read our guide to the Statutory Residence Test.
How Different UK Pensions Are Taxed For Non-Residents
UK State Pension
The State Pension is paid gross, with no tax deducted at source. For non-residents it can also fall under the disregarded income rules. In broad terms, these limit your UK tax on certain types of UK income, including the State Pension, to any tax already deducted at source, which for the State Pension is none. In many cases that means no UK tax is due on it, even before a treaty is considered.
There is a trade-off, though. Applying the disregarded income rules means you lose the UK personal allowance, so you need to look at your other UK taxable income to decide whether this is beneficial. A UK tax planning consultation can help you decide.
A treaty can add further protection. Under many treaties the State Pension is taxable only in your country of residence, so you declare it there. Private and workplace pensions are generally not covered by the disregarded income rules, which is why the NT code process below matters for those.
Private And Workplace Pensions
Pensions from a former employer are usually paid through PAYE, so UK tax is deducted before you receive them. Under most treaties, private pensions are taxable only where you are resident, but the UK provider will keep deducting UK tax until HMRC tells them otherwise (see the NT code section below).
SIPPs And Personal Pensions
These generally follow the same treaty rules as private pensions, and the same PAYE deduction applies until an NT code is in place. If you are taking money out flexibly, the way it is paid can affect which tax code is applied, which we cover in the lump sum section.
Government Service Pensions
Pensions paid for government service, such as civil service, armed forces or NHS, are often taxable only in the UK, even if you live abroad. Treaties usually include a separate article for these, with exceptions for people who are both resident and a national of the other country. HMRC’s list of government service pensions can help you identify which are included.
Do Non-Residents Get The UK Personal Allowance?
Not automatically. The personal allowance is currently £12,570 and is frozen at that level for 2026/27, but non-residents only qualify if they fall into particular groups. UK nationals are the most common case, and some other categories also qualify. Many other nationals do not, and they would be taxed from the first pound of UK pension income unless a treaty protects them.
If you are entitled to the allowance and your only UK income is a pension below that amount, you will typically have no UK tax to pay. Above the allowance, UK income tax is charged at 20% on the first £37,700 of taxable income, then 40% up to £125,140 and 45% above that. This applies even if you don’t qualify for the personal allowance, in which case your pension is taxed from the first pound.
If your only UK income is the State Pension, the disregarded income rules may mean the personal allowance doesn’t matter in practice. Once you also have a private pension, rental income or other taxable UK income, the allowance becomes important, and applying the disregarded income rules would mean losing it (see the State Pension section above).
HMRC’s full list of non-residents who receive the personal allowance shows who is eligible.
How Double Tax Treaties Affect Your UK Pension
A double tax treaty decides which country has the main right to tax each type of income, so you don’t pay full tax twice. For private pensions, the pensions article in most UK treaties gives that right to the country where you live. That is why someone resident in Spain or Portugal can usually pay tax on a UK private pension locally rather than in the UK.
How the pension is paid matters. Regular pension payments, annuities, flexible drawdown and one-off lump sums can each be treated differently under a treaty. Regular pensions and annuities are the most likely to fall squarely within the pensions article, while a lump sum may be dealt with differently depending on the treaty. The 25% tax-free element is a UK rule, so your country of residence may still tax it.
The exact wording of the treaty is what decides this. Many treaties refer to “pensions and other similar remuneration”, a broad phrase that is more likely to cover drawdown and lump sums. Others refer only to “pensions and annuities”, in which case a lump sum may fall under the “other income” article instead, and the UK may keep the right to tax it. Some treaties also include specific rules for lump sums, government pensions or pensions from particular types of scheme.
Treaties are country-specific, so you need to check the pensions article, and any related articles, in the treaty for your country of residence, which HMRC lists by country. Countries without a UK treaty fall back on UK domestic law, so UK tax may remain payable. Our guide to UK double taxation agreements explains how treaties work in more detail, and our double tax relief service covers how to apply a treaty to your income.
UK Pension Tax Treaty Summary: Nine Popular Expat Destinations
The table below summarises how the UK’s treaties with nine popular expat destinations treat different types of UK pension for UK non-residents who are tax resident in the country below. Treaty wording changes over time and by country, so always check the treaty text for your own situation.
This table is a general guide only. Treaty articles, HMRC guidance and local tax rules can change, and the position can depend on your nationality and how the pension is paid, so check the treaty text for your country of residence before relying on it.
If you are moving to Cyprus, our UK tax when moving to Cyprus guide covers Cyprus tax residence, non-dom status and how Cyprus taxes pension income.
How To Claim An NT Code For Your UK Pension
An NT (No Tax) code is an instruction from HMRC to your pension provider to pay your pension without deducting UK income tax. Without one, UK tax keeps being taken at source even if the treaty says it shouldn’t be. For more on how tax codes work, see our guide to UK tax codes explained.
Step-By-Step: Form DT-Individual
- Check HMRC’s guidance for the right form for your country of residence. Most countries use Form DT-Individual, but a few, such as Canada, have their own form.
- Complete your details and the pension details.
- Get the form certified by your overseas tax authority, or, if your country doesn’t certify it, get the certificate of residence your country issues instead.
- Send the completed form, with the certification or certificate, to HMRC.
- HMRC issues an NT code to your pension provider, who then pays your pension gross.
How Long It Takes
Processing times vary and can take several weeks. In a recent case, we submitted a completed DT-Individual form to HMRC on 14 September 2026 and the NT code was issued on 30 September 2026, 16 days later. That was a straightforward claim with the correct certificate attached from the start. Timings differ case by case, so treat this as an example, not a guarantee.
If Tax Has Already Been Deducted
If UK tax has already been taken, how you get it back depends on the tax year. For the current tax year, a DT-Individual claim can include a repayment request, so HMRC can repay tax already deducted as well as stopping further deductions. For earlier tax years, or where you are filing a return anyway, you claim through Self Assessment.
UK tax returns cannot be submitted until after the end of the tax year on 5 April, so you may have to wait several months after the tax was withheld to receive a refund through the return. HMRC will pay tax return refunds directly to a UK bank account or issue a cheque.
Example: UK Pension Income For A Couple Living In Portugal
We recently supported a couple living in Portugal who receive UK pension income and were having UK tax deducted at source. Portugal is one of the countries where the process is different, and it is a good illustration of why you should check your country’s rules before sending anything.
For most countries, you send Form DT-Individual to your local tax authority, which certifies it and returns it to you to send to HMRC. Portugal doesn’t do this. The Portuguese tax authority will not certify the form. Instead, HMRC requires a Portuguese certificate of residence (Certificado de Residência Fiscal) to be sent in with the completed form, which is explained in HMRC’s PAYE manual.
So the sequence was:
- The couple obtained their Portuguese certificates of residence in advance through the Portal das Finanças, the Portuguese tax authority’s online portal, where the certificate is free to request.
- We completed Form DT-Individual for each pension.
- We submitted the completed form to HMRC with the certificates attached, on 14 September 2026.
- HMRC issued the NT code on 30 September 2026, so the pension provider could stop deducting UK tax.
The main lesson is to get the certificate before you submit. Sending the form to the Portuguese authorities, as you would for many other countries, wastes time and delays the NT code.
Do You Need To File A UK Tax Return?
Not always. You may not need to file a return if your only UK income is a pension paid under PAYE, the right amount of UK tax has been deducted (or your NT code means none is deducted), and HMRC hasn’t asked you to file.
You may still need to file if you have other UK income, such as rental income, or if you are claiming that your pension is not taxable in the UK under a treaty and the claim hasn’t been dealt with through an NT code. In that case you will normally need to show it on your return with Self Assessment helpsheet HS304, for each year the claim applies. Our guide on who needs to file a UK tax return explains the wider rules, and our UK tax return support for expats service handles the filing.
Taking A Pension Lump Sum As A Non-Resident
Under UK rules, up to 25% of a pension can usually be taken tax-free, subject to the lump sum allowance (currently £268,275). The remaining 75% is taxed as pension income. For non-residents, a large first withdrawal can trigger an emergency tax code, which deducts far more UK tax than treaty rules would require.
The practical point is to have your NT code in place before you draw anything. Also, check how your country of residence treats the lump sum, because the UK tax-free element is not always tax-free locally.
There is a further risk if you return to the UK. Under the temporary non-residence rules, certain pension lump sums and flexible withdrawals taken while you were non-resident can become taxable in the UK if you come back to UK residence after a period of non-residence of five years or less, even if a treaty gave your country of residence the right to tax them at the time. If there is any chance you will return, check this before taking a large withdrawal. Our guide to breaking UK tax residence covers the temporary non-residence rules.
Common Mistakes Expats Make With UK Pensions
- Not applying for an NT code, and so paying UK tax unnecessarily for years
- Assuming a treaty applies automatically without making a claim
- Sending Form DT-Individual to the wrong place, without checking whether your country certifies it or needs a separate certificate of residence
- Forgetting to declare the pension in your country of residence
- Not telling HMRC or your pension provider when you move country
- Taking a lump sum before the NT code is in place, or without considering the temporary non-residence rules
- Assuming all pensions are treated the same way, when government pensions often aren’t
Frequently Asked Questions
Do I pay UK tax on my UK pension if I live abroad?
Often not, if the treaty with your country of residence gives that country the right to tax it, but you usually have to claim relief. UK pension income is taxable in the UK under domestic law, but under many treaties private pensions and the State Pension are taxed only where you live. You normally need to apply for an NT code to stop UK tax being deducted.
Is the UK State Pension taxed if I live overseas?
The State Pension is still taxable income, but it is paid gross. For non-residents it can fall under the disregarded income rules, which usually limit UK tax on it but mean losing the personal allowance, and many treaties also give the right to tax it to your country of residence, so you would declare it there. Check the specific treaty and your wider UK income, as the position can change if you have other UK income.
What are the disregarded income rules for non-residents?
They are UK rules that limit the UK tax a non-resident pays on certain types of UK income, including the State Pension, savings interest and dividends. In broad terms, UK tax on that income is capped at any tax already deducted at source. Applying them means you lose the UK personal allowance, so they are not always beneficial if you have other UK income. They sit alongside, and are separate from, any relief under a double tax treaty.
How do I stop my pension provider deducting UK tax?
Apply for an NT code using Form DT-Individual. Once HMRC approves it, they tell your provider to pay the pension without UK tax. If you need help with the form, our double tax relief service can assist.
Does Portugal certify Form DT-Individual for UK pensions?
No. The Portuguese tax authority doesn’t certify HMRC’s DT-Individual form. Instead, you request a Portuguese certificate of residence (Certificado de Residência Fiscal) through the Portal das Finanças and send it to HMRC with the completed form. HMRC lists this and similar country-specific rules in its PAYE manual.
Is a UK pension lump sum taxed if I live abroad?
It depends on the treaty and how the lump sum is paid. Under UK rules, up to 25% is usually tax-free and the rest is taxed as pension income. Some treaties give your country of residence the right to tax lump sums, while others leave the UK with that right, so the wording matters. Your country of residence may also tax the 25%, even though it is tax-free in the UK. If you return to the UK within five years of leaving, the temporary non-residence rules can bring some lump sums and withdrawals back into UK tax. It is best to have an NT code in place before you draw anything.
Can I get a refund of UK tax already deducted?
Often yes. If a treaty means the pension should not have been taxed in the UK, you can normally claim the tax back. For the current tax year, a DT-Individual claim can include a repayment request. For earlier years, or if you are filing a return anyway, you claim through Self Assessment, which can only be done after the tax year ends.
Does moving countries affect my NT code?
Yes. An NT code is tied to your residence and the treaty that applies, so you need to tell HMRC and your provider if you move and may need to make a new claim.
Related Guides
More guides on double tax treaties, tax codes and your UK tax position as a non-resident.
Receiving a UK pension while living abroad?
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