If there is a double taxation agreement between the UK and the other country that stipulates that the pension should only be taxed in the UK, then you should seek reimbursement of foreign taxes from the Overseas Authority (not the HMRC). To do this, you should seek advice abroad. HMRC should not accept an application for a foreign tax credit exemption for taxes reimbursed by the Overseas Authority. That is the general rule and it is found in most treaties. In cases where this applies, this means that, for a person established in the United Kingdom (for the purposes of the agreement), pensions paid on the basis of previous employment are taxable only in the United Kingdom. This means that they should not be taxed in the other country. If this has been the case, it should be possible to apply for a refund from the overseas tax authorities. In this case, it is not appropriate to require relief in the UK (through a foreign tax credit). With respect to the former, it seems that there are public and municipal pensions, and then there are public and municipal pensions.
In fact, if the pension is related to government work, it is assumed that it is taxable only in Britain, subject to citizenship issues that I will address shortly. There is confusion about what exactly the government`s job is. I hope that the Tax Commissioners believe that teacher work would be considered a public service and public work on behalf of the government, but that it was not considered a job of the state for the taxation of the pension. Read here how foreign income and profits are taxed? further discussion on these issues. For the rest, we consider the tax treatment of foreign pensions provided that the tax transfer base does not apply. In Ireland, there is a double tax on UK corporate tax, which is paid on the commercial and capital profits of the branch. The amount of the UK tax credit cannot be higher than the Irish tax levied on the same income. The effective rate of Irish income is not determined by the tax rate, but by the actual effective rate.
The UK effective tax rate is determined by deifying the total amount of UK income tax by gross income calculated by UK tax on that source. Any UK tax that is not exempt from credit will be admitted as a UK income deduction included. If you have a source of income in the UK to which you have deducted tax under PAYE, you may be able to ensure that HMRC deducts the tax owed on the foreign pension by adapting your tax code (for example. B as tax is sometimes levied on public pensions in the UK). This may mean that you can avoid having to file a UK self-assessment return if you do not meet any of the criteria for filing a tax return. For more information, see How is the tax removed from my state pension?. For example, an Italian national receiving an Italian “civil servant`s pension” in the United Kingdom (within the meaning of the corresponding double taxation agreement) is only taxed in Italy. If such a person were by chance a national of the United Kingdom (and not Italian), such a pension would only be taxable in the United Kingdom.
⚠️ note that social security pensions are not considered “taking into account previous employment” or are considered paid for services to the government – these are treated below. This page contains only information on your tax position in Britain. The tax situation abroad is not taken into account, except for how it can be influenced by the terms of a double taxation agreement.