UK Government Pension US Tax: Who Taxes It Under Article 19

The UK government pension US tax answer turns on two facts: where you live and which passport you hold. Under Article 19(2) of the US-UK tax treaty, a pension paid by the UK government for government service is taxable only in the UK. The exception applies when you are both resident in and a national of the United States. In that case, only the US taxes it.

That short treaty sentence produces four very different results for retired civil servants, diplomats and armed forces veterans. A British passport, a US passport or a green card can decide whether HMRC deducts tax from your pension for the rest of your life. This guide sets out who taxes what, the green card trap that catches British retirees in the US, and the forms that stop UK tax being taken at source.

What counts as a UK government pension for US tax

In treaty terms, a government pension is one "paid by, or out of funds created by" a Contracting State, a political subdivision or a local authority, for services rendered to that State. The test looks at who pays and what the service was. The name of the scheme does not decide it.

Schemes that sit squarely inside Article 19

The Principal Civil Service Pension Scheme (including the alpha section), the Armed Forces Pension Scheme and pensions for Diplomatic Service staff are textbook Article 19 pensions. Central government funds them, and they reward service to the Crown.

Schemes you should confirm before claiming

The NHS Pension Scheme, the Teachers' Pension Scheme, police pensions and the Local Government Pension Scheme are public-sector schemes. However, the employer is often an NHS trust, an academy trust or a council rather than a government department. Before you take either a UK-only or a US-only position on one of these, get the classification confirmed in writing by the scheme administrator or HMRC. In our files, a wrong classification is the most common reason a self-prepared treaty claim unravels.

What Article 19 does not cover

Article 19(3) sends pensions for work in a government-run business back to the ordinary pension rules in Articles 14 to 17. Separately, the UK State Pension is a social security benefit, not a government service pension, and Article 17(3) governs it. Our guide to UK State Pension US tax covers that payment.

The Article 19 decision table: who taxes your pension

Article 19 does not work alone. The saving clause in Article 1(4) lets the US tax its citizens and residents as if the treaty did not exist. Article 1(5)(b) then restores the Article 19 benefit, but only for people who are neither US citizens nor green card holders. We built the table below from the treaty text published on GOV.UK.

Why the green card holder is taxed by both countries

A British national with a green card is a US tax resident but not a US national. Consequently, Article 19(2)(b) does not move the taxing right to the US, and the UK keeps it under Article 19(2)(a). Meanwhile, the saving clause lets the US tax its lawful permanent residents, and Article 1(5)(b) denies them the Article 19 exemption. The UK therefore taxes first, and the US gives a credit for the UK tax under Article 24.

What changes when you naturalise

Naturalising as a US citizen flips the result. From that date you are a resident and a national of the US, so the pension becomes taxable only in the US. HMRC runs PAYE on a 6 April to 5 April tax year, so a mid-year naturalisation usually means one split year. You can generally reclaim UK tax deducted from later payments, within HMRC's four-year time limit for claims.

Worked example: three retirees, one pension

The figures below are illustrative. Each retiree draws a £30,000 Civil Service pension in 2026/27. The UK personal allowance is £12,570 for 2026/27 according to GOV.UK income tax rates, and British nationals keep it when non-resident. Where the UK taxes, the bill is therefore (£30,000 − £12,570) × 20% = £3,486.

Helen: dual US-UK national retired to Florida

Helen is resident in, and a national of, the US. Article 19(2)(b) gives the US the sole taxing right. Once HMRC issues an NT code, her pension is paid gross. She reports the dollar equivalent on Form 1040 as pension income, and no UK tax arises to credit.

Tom: British national with a green card in Arizona

Tom suffers £3,486 of UK PAYE. He also reports the full pension on his US return. However, he claims the UK tax as a foreign tax credit on Form 1116 in the general category. For most single filers on this income, the UK tax exceeds the US tax on the pension, so the US bill on it falls to nil and the surplus credit carries forward under section 904(c).

Priya: British national on an E-2 visa in Texas

Priya meets the substantial presence test, so she is a US tax resident. Because she is neither a citizen nor a green card holder, Article 1(5)(b) gives her the Article 19 exemption. As a result, the UK taxes the pension and the US does not. She must disclose the exemption on IRS Form 8833.

The same pension produces three different tax outcomes. The deciding factor is not the money but the passport and immigration status of the person receiving it.

How to stop UK tax being deducted at source

If Article 19(2)(b) makes your pension US-only, HMRC still deducts tax until it receives a valid claim. You need an NT (no tax) code issued to the scheme.

Form US-Individual 2002 and Form 8802

HMRC's Form US-Individual 2002 is the claim for relief from UK tax on pensions paid to US residents. You send it to the IRS with Form 8802, which requests certification of your US residence and carries a user fee. The IRS certifies the form and passes it to HMRC, which then issues the NT code. A new form is needed for each new pension.

Proving nationality

Article 19(2)(b) depends on nationality as well as residence. Therefore, expect to supply evidence of US citizenship with the claim. A US residence certificate alone shows only half the test.

Reporting the pension on your US return

Form 1040 and currency conversion

Report the gross pension on Form 1040 as pensions and annuities. Convert sterling using either the rate on each payment date or the IRS yearly average rate, and apply the method consistently. IRS Publication 54 explains currency conversion for taxpayers abroad.

When Form 8833 is needed

You need Form 8833 when you rely on the treaty to exclude the pension from US tax, as Priya does. Section 6712 sets a $1,000 penalty for an individual who fails to disclose a treaty-based return position. Our guide on when Americans in the UK must file Form 8833 covers the wider rules.

When Form 1116 is needed

If both countries tax the pension, claim the UK tax on Form 1116. The mechanics, including carryovers, sit under our foreign tax credit and double taxation pillar. Separately, if your lump sum is the issue rather than the income, see our guide to the UK pension lump sum and US tax.

Checklist before you move or naturalise

• Confirm in writing whether your scheme is a government service pension under Article 19.
• Record your nationality and immigration status on the date each payment is made.
• If you will be a US national resident in the US, file Form US-Individual 2002 with Form 8802 promptly.
• If you hold a green card only, plan for UK PAYE plus a Form 1116 credit, not an exemption.
• If you rely on Article 19 for a US exemption, attach Form 8833 every year.
• Track naturalisation dates against the UK tax year so you can reclaim overlapping UK tax.

How Tranzesta can help

Tranzesta prepares US and UK returns for public-sector retirees on both sides of the Atlantic. We confirm the Article 19 classification, file the HMRC and IRS forms that switch off UK withholding, and model the effect of naturalisation before you apply. To review your pension position, book a consultation with our cross-border team.

Frequently Asked Questions

Is a UK Civil Service pension taxable in the US?

A UK Civil Service pension is taxable in the US if you are a US citizen or green card holder, because the treaty saving clause preserves US tax on them. If you are a US national living in the US, Article 19(2)(b) of the US-UK treaty makes it taxable only in the US. A British national living in the US on a non-immigrant visa can usually exclude it from US tax under Article 19.

Do I pay UK tax on a UK government pension after moving to the US?

You stop paying UK tax on a UK government pension only if you are both resident in and a national of the US, under Article 19(2)(b) of the US-UK treaty. Otherwise, the UK keeps the right to tax it under Article 19(2)(a). To stop deductions at source, you file HMRC Form US-Individual 2002 through the IRS to obtain an NT tax code.

Does a green card holder pay UK tax on a UK government pension?

Yes, a British national with a US green card generally pays UK tax on a UK government service pension. A green card makes you a US resident but not a US national, so Article 19(2)(b) does not apply. The US also taxes the pension, but it allows a foreign tax credit for the UK tax on Form 1116.

Is the NHS Pension Scheme a government pension under the US-UK treaty?

The NHS Pension Scheme is a public-sector scheme, but whether it counts as a government service pension under Article 19 of the US-UK treaty is a classification question. Many NHS employers are trusts rather than government departments. Confirm the treatment with NHS Pensions or HMRC in writing before claiming a UK-only or US-only position.

How do I get an NT tax code for a UK pension while living in the US?

You obtain an NT tax code by completing HMRC Form US-Individual 2002 and sending it to the IRS with Form 8802 and the user fee. The IRS certifies your US residence and forwards the form to HMRC. HMRC then instructs the pension payer to pay without deducting UK tax.

Is the UK State Pension a government pension under Article 19?

No, the UK State Pension is a social security benefit, not a government service pension. Article 17(3) of the US-UK treaty governs it, not Article 19. As a result, the nationality test in Article 19(2)(b) does not affect how the UK State Pension is taxed.