is it possible you have your answer but are unwilling to accept it?
1) the US taxes the world wide income of all its citizens
2) the UK and the US have agreed that pensions are taxable.
3) the US and the UK have agreed to a treaty to ensure that the same dollar of income is not taxes by both counties and have rules to determine which country is going to tax the pension (it's based on residence).
4) the treaty further states that if one country wouldn't tax the pension if you lived there, doesn't mean the other country can't tax the pension.
5) you state that the UK pension is taxed by the UK over L12,000. Therefore the US won't tax that because if it did, then the two countries would would taxing the same dollar which is against the treaty.
6) you state that the UK pension is not taxed by the UK under L12,000. But again as stated in paragraph 1b of article 17, if the UK decides not to tax the pension and you are receiving the pension while living in the US, that doesn't preclude the US from taxing it.
5) Private pensions are all taxed in the US.
6) therefore your pension under L12000 is subject to tax (there are more rules, just like there are for US pensions, that contributions are not taxable upon distribution as part of the pension payment)
You are unlikely to find a black and white answer - that is why there are lawyers, CPAs and tax accountants.
