Double taxation agreement how does it work?

webwiz

I receive a pension from Norway as I worked there for some years. There is a double taxation agreement but I don't know how it works. Is it

a) Any tax paid in Norway can be offset against tax payable in the UK, or

b) If the income is taxed in Norway then it wont be taxed here.

If it is (a) then what if the tax payable in Norway is greater than it would have been here? will this reduce my UK tax bill?

If it is (b) what if there is no tax payable in Norway because it is less than the personal allowance. Does this mean I escape tax altogether?

fengirl_2

It means that your Uk tax liability on the Norwegian pension can be partly or completely covered by Norwegian tax paid.
If your Uk liability on the pension was, say £1000 and you paid £1200 Norwegian tax, that would wipe out your UK tax liability.
If your UK liability on the pension was £1000 and you only paid £800 in NOrwegian tax, then you would need to pay £200 in UK tax.

webwiz

Thanks.

If your Uk liability on the pension was, say £1000 and you paid £1200 Norwegian tax, that would wipe out your UK tax liability.

But I could not offset the "spare" £200 against other UK income?

fengirl_2

No, its Norwegian tax and cannot be used against other UK tax liabilities.