What the treaty says about regular pension income
Article 17(1) of the 2001 UK-US double taxation convention makes pensions and other similar remuneration taxable only where the beneficial owner is resident. So once you are US tax resident, a UK personal pension, SIPP or workplace scheme is taxed by the US, not the UK; Article 17(3) applies the same rule to the State Pension. One carve-out: under Article 19 a UK government service pension stays UK-taxable unless you are both US resident and a US national. In practice UK payers often deduct tax until treaty relief is in place, claimed on the US version of HMRC's treaty claim form. The general mechanics are covered in our guide to foreign pensions and QROPS.
The 25% lump sum is the contested part
Article 17(2) says a lump sum from a UK scheme paid to a US resident is taxable only in the UK. But the saving clause in Article 1(4) lets the US tax its residents and citizens as if the treaty had not come into effect, and the lump sum paragraph is not protected from it. A separate protected rule, Article 17(1)(b), exempts amounts that would be exempt from UK tax if you were still UK resident: some advisers rely on it to protect the 25% lump sum, others read the lump sum paragraph as overriding it. There is no clear published IRS position, so we treat it as contested and plan lump sum timing accordingly.
How this works in practice
You normally leave the pension in the UK and draw it across the border. A transfer to a scheme not on HMRC's recognised list is an unauthorised payment taxed at 40% or more, and even recognised transfers can attract the 25% overseas transfer charge. We handle the UK side, residence, the treaty claim and filings, as Chartered Tax Advisers. The US return itself is handled by our US partners (Enrolled Agents and CPAs), whom we coordinate for you, so the HMRC position matches the IRS reporting. Our companion guide on moving to the US from the UK covers the full move-year picture.