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Ask Your Own Question, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 5144
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I have recently retired and am getting my UK state pension

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I have recently retired and am getting my UK state pension of £566 pm. I am also getting a Swedish gov. pension of £545 pm for when I lived and worked in Sweden for 20 years.
Is my Swedish pension deducted from my UK pension?
Will I be able to receive both pensions?
Will there be tax payable?
If so, how much tax would be payable?
Many thanks,
Hello and welcome to the site. Thank you for your question.

As far UK taxation is concerned, as UK resident your worldwide income is chargeable to UK taxation.

Your Swedish government pension is unrelated to your UK state pension and it will not be deducted from your UK pension. So, there is no reason why you should not get both pensions.

Your total income in a tax year would be (566+545)x12=£13,332
Based on personal allowance for 2015-16 of £10,600, your taxable income wouldl be (13,332-10,600)=£2,732 and the tax on it at 20% would be £546.40.

You will be able to claim foreign tax credit relief against foreign tax suffered on swedish Government pension by completing supplementary pages SA106-Foreign on your tax return.

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond. and other Tax Specialists are ready to help you

Adrian, you can take 10% off the value of overseas pensions so that you only pay tax on 90% of the amount received.

So your total income becomes
Overseas pension (545*12) x90% = £5,886
UK State pension (566*12) = £6,792
Taxable income (5,886+6,792)-10,600 = £2,078
Tax at 20% (2,078*20%) =£415.60

More information on 10% deduction can be found on Page BFN 7 of SA106(B) notes here

I hope this is helpful and answers your question.

I thank you for accepting my answer.

Best wishes.