UGH! And I thought this would be easily answered.
Well yes, the quote you gave me does say that. But then I go on to read a Department of the Treasury document that gives an example under Article 17 where a pension not taxed in one country isn't taxed by where the recipient is living. The problem is it only gives the example of a US citizen resigpding in the UK & receiving pension payments from a US based fund.
"However, the State of residence, under subparagraph (b), must exempt from tax any
amount of such pensions or other similar remuneration that would be exempt from tax in the
State in which the pension scheme is established if the recipient were a resident of that State.
Thus, for example, a distribution from a U.S. "Roth IRA" to a U.K. resident would be exempt
from tax in the United Kingdom to the same extent the distribution would be exempt from tax in
the United States if it were distributed to a U.S. resident. The same is true with respect to
distributions from a traditional IRA to the extent that the distribution represents a return of non-
deductible contributions. Similarly, if the distribution were not subject to tax when it was “rolled
over” into another U.S. IRA (but not, for example, to a U.K. pension scheme), then the
distribution would be exempt from tax in the United Kingdom."
What it doesn't say is what happens when it's the other way around. You'd think it would be bi-latteral, I've not found anything that says otherwise, but if only it were so simple as to be put in plain English!
