What the UK-US treaty says
Article 17(3) of the UK-US double tax treaty deals with social security directly: payments made by one country under its social security legislation to a resident of the other country are taxable only in that other country. For a UK resident drawing US Social Security, the UK alone taxes the benefit and the US does not. Unusually, this rule is one of the few listed as an exception to the treaty's saving clause, so it protects US citizens living in the UK as well. HMRC confirms this reading in its Double Taxation Relief Manual at DT19853, and our UK-US tax treaty guide explains how the saving clause normally works.
How HMRC taxes it and how you report it
As a UK resident you are normally taxable on your worldwide income, so the benefit is taxed as overseas pension income at your usual Income Tax rates. You convert the payments to sterling and report them on the foreign pages of a Self Assessment tax return. Because the treaty gives the UK sole taxing rights, no US tax should ultimately stick to the benefit. One possible exception on the UK side: a new arrival in one of their first four UK tax years, after at least ten consecutive years of non-UK residence, may be able to claim relief on eligible foreign income under the Foreign Income and Gains regime, which should be confirmed for your facts.
The US side, and how it differs from a 401(k)
US citizens and green-card holders still file US returns each year even though the treaty stops US tax on the benefit itself; taking the treaty position correctly on the US return is handled by our US partners (Enrolled Agents and CPAs), whom we coordinate for you. Note that Social Security is treated more favourably than US retirement accounts: regular 401(k) and traditional IRA payments are UK-taxable, and since March 2025 HMRC also treats lump sums from taxable US plans as UK-taxable, with credit for US tax paid. Our 401(k), IRA and Roth guide covers those rules.