UK Pension Income - Double Taxation Agreement

Treaty rule: 

Under Article 17 of the UK–South Africa Double Taxation Agreement, private UK pension income is generally taxable in South Africa for South African tax residents (QROP Direct) , not in the UK. The recipient should apply for NT (No Tax) coding from HMRC to prevent UK income tax withholding, since SARS taxes the income instead (QROP Direct) . The exception is government service pensions (civil service, military, police) — those are generally taxable only in the UK (QROP Direct) , so a former UK public servant keeps paying UK tax on that portion.

Domestic exemption is disappearing: 

Historically, foreign pension/lump-sum income received by SA residents (for services rendered outside SA) was exempt under s10(1)(gC). That's changing — foreign retirement benefits received by South African tax residents become taxable under domestic legislation from 1 March 2026 (KPMG) , closing the double-non-taxation gap. If enacted, foreign pension income received by an SA resident would be included in taxable income and taxed at SARS scale rates up to 45% (IBN) .

Practical effect for your expat clients:

UK private pensions/SIPP drawdowns/annuities: taxed by SARS at normal scale rates (18–45%), with UK withholding avoided via NT coding. UK government service pensions: stay UK-taxed only.

UK State Pension:  No special SA exemption, and note the UK treats SA as a "frozen" country — the UK State Pension does not receive annual uprating for South African residents (QROP Direct) .

Lump sums have been the main area historically shielded by the exemption — that shelter is what's being removed from 1 March 2026, so timing of any lump-sum withdrawal before/after that date matters a lot for clients still deciding.