Jurisdiction(s):
United Kingdom

Masters v HMRC: FTT: SIPP withdrawals post defined benefit transfer retain sufficient employment link under UK–Portugal DTC Art 17; taxable in Portugal; obiter: Art 20 requires actual taxation.

Published on: 19 September 2025

Published by a LexisNexis Pensions expert

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Table of contents

What are the practical implications of this case?
What was the background?
What did the court decide?
Case details

Article summary

What are the practical implications of this case?

The central question on this appeal was whether the pension drawdowns were ‘paid in consideration of employment’. HMRC argued that moving occupational pension entitlements to a SIPP, essentially an investment product that does not require employment as a condition, severed the necessary link to the original employment and meant the pension could be taxed in the UK. As many of the UK’s DTCs with other jurisdictions include wording similar to the UK–Portugal DTC, the outcome may have significant consequences for expats whose situations resemble that of the appellant. The First-tier Tribunal Tax (FTT) offers helpful clarification of the principles to be applied when deciding whether there is a sufficiently strong connection between an expat’s pension withdrawals and their former employment in such cases...

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