INTM163170 - UK residents with foreign income or gains: income arising abroad: Government remuneration

Under the provisions of the government services Article in a double taxation agreement an individual who is resident in the UK is normally exempt from UK tax on remuneration paid to him by the other state for services rendered to that state (INTM163190). Many agreements also provide that remuneration paid by a political sub-division or a local authority for services rendered to them is similarly exempt. References to government etc' or state etc’ in succeeding instructions are intended to include political sub-divisions or local authorities where they are mentioned in the relevant agreement.

There are some exceptions to this general rule. For example, there is no exemption if:

  1. the remuneration is paid for services rendered in connection with a business carried on by the state etc. paying the remuneration, or
  2. the services are rendered in the UK and the individual is a UK national or did not become a resident of the UK solely for the purpose of rendering those services, or
  3. the individual is a UK national and at the same time is not a national of the other country.

Refer to the text of the Article in the relevant agreement to see what the conditions for exemption are in order to ensure that they are fulfilled.