Is it possible to get clarification on this ? The whole purpose of the Tax Treaty between the US and the UK is to avoid paying double tax. I have a small private pension in the UK and paid approx $2,000 UK tax on this pension. Do I now have to declare this on my 1040 as foreign income and pay additional tax in the USA? Doesn't Article 17, Section 1 para b) apply?
"a) Pensions and other similar remuneration beneficially owned by a resident of a
Contracting State shall be taxable only in that State.
b) Notwithstanding sub-paragraph a) of this paragraph, the amount of any such
pension or remuneration paid from a pension scheme established in the other Contracting State [my case:UK]
that would be exempt from taxation in that other State if the beneficial owner were a resident
thereof shall be exempt from taxation in the first-mentioned State. [in my case the USA]"
