Trevor John Masters v The Commissioners for HMRC

Trevor John Masters v The Commissioners for HMRC

The SIPP withdrawals were paid in consideration of past employment because the funds originated from the Appellant’s occupational pension scheme, were transferred directly to the SIPP without becoming his property, and no further contributions were made. The causal connection to past employment was not broken. Therefore, Article 17 of the UK-Portugal DTC applies, allocating taxing rights to Portugal, and the UK is prevented from taxing the withdrawals.

Parties
Appellant: Trevor John Masters; Respondents: The Commissioners for His Majesty’s Revenue and Customs
Jurisdiction
England and Wales
Judgment Date
26 August 2025
Procedural Posture
Tax Appeal / First Tier Tribunal Judgment
Outcome
Appeal allowed
Legal Topics
Double Taxation, Pensions, Treaty Interpretation, Income Tax, Residence and Domicile
Tax Law International Taxation Double Taxation Pensions Treaty Interpretation Income Tax Residence and Domicile

Case Brief

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Parties

Trevor John Masters

Appellant

The Commissioners for His Majesty’s Revenue and Customs

Respondents

Procedural Posture

Tax Appeal / First Tier Tribunal Judgment

Legal Issues

  1. 1 Whether withdrawals from the Appellant’s Self-Invested Personal Pension (SIPP) paid while resident in Portugal are taxable in the UK or Portugal under the UK-Portugal Double Tax Convention (DTC)
  2. 2 Whether the SIPP withdrawals were 'paid in consideration of past employment' within Article 17 of the DTC
  3. 3 Whether Article 20 of the DTC applies if Article 17 does not

Ratio Decidendi

The SIPP withdrawals were paid in consideration of past employment because the funds originated from the Appellant’s occupational pension scheme, were transferred directly to the SIPP without becoming his property, and no further contributions were made. The causal connection to past employment was not broken. Therefore, Article 17 of the UK-Portugal DTC applies, allocating taxing rights to Portugal, and the UK is prevented from taxing the withdrawals.

Court Disposition

Appeal allowed

Orders

  • HMRC’s closure notice and claim closure notice are set aside; the SIPP withdrawals are not taxable in the UK for the relevant tax year.