Income Tax (Earnings and Pensions) Act 2003 section 678

Taxable benefits: foreign benefits

Section 678 identifies which social security benefits payable under the law of a country or territory outside the United Kingdom are taxable in the United Kingdom.

• A foreign benefit is taxable if it is substantially similar in character to a benefit listed in Table A of the Act
• The benefit must be payable to a person who is resident in the United Kingdom
• If a foreign benefit also qualifies as pension income taxable under Part 9 of the Act, it is taxed only as pension income and not under this section
• This boundary rule prevents double taxation and ensures foreign benefits that take the form of a pension qualify for the pension income tax treatment