DT11904 - Double Taxation Relief Manual: Guidance by Country: Lesotho: Treaty Summary
The table summarises the provisions of the treaty as they relate to income beneficially owned by UK residents. The rate shown is the ‘treaty rate’ and does not reflect taxes chargeable under domestic law before relief is given under the provisions of the treaty. The ‘treaty rate’ is the maximum rate at which Lesotho is permitted to tax income in the relevant categories under the treaty. Rates chargeable under domestic law may be higher or lower.
In all cases other conditions for relief (e.g. beneficial ownership) will have to be met before relief is due under the treaty. The text of the treaty itself should be consulted for the full details. The text of the treaty can be found on gov.uk.
| Subject | Comments | Article |
|---|---|---|
| Portfolio dividends | 10% | 10 |
| Dividends on direct investments | 5% | 10 |
| Conditions for lower rate on dividends on direct investments | The beneficial owner must be a company which controls, directly or indirectly, at least 10% of the capital of the company paying the dividends | 10 |
| Property income dividends | 15% | 10 |
| Interest | 10% (Note 1 ) | 11 |
| Royalties | 7.5% | 12 |
| Pensions | May be taxed in Lesotho and the UK. The UK will provide credit against tax suffered in Lesotho (Note 2) | 17 |
| Government pensions | Taxable only in Lesotho unless the individual is a resident and national of the UK | 18 |
| Arbitration | Yes | 24 |
Note 1: Interest is taxable only in the UK where such interest is paid in respect of a loan from:
- the UK government, a political subdivision or a local authority of the UK
- the Bank of England
- any agency or other entity wholly owned by the UK government, a political subdivision, or a local authority of the UK
Note 2: Pensions paid under a public scheme which is part of Lesotho’s social security system are taxable only in Lesotho.
A lump sum payment derived from a pension scheme established in Lesotho and paid to a resident of the UK is taxable only in Lesotho.
In addition, where an individual is entitled to the benefits of the 1997 double taxation convention (DTC) and was in receipt of pensions or other similar remuneration, or pensions paid under a public scheme which is part of Lesotho’s social security system immediately prior to 18 September 2018, then the provisions of the 1997 DTC will continue to apply. Such pensions were taxable only in the UK under the 1997 DTC. See Article 28(4).