John, Re: The only flaw in this is that tax on a Government pension has to be paid in the UK from what i have been told "
I've seen the same on SFN before. What I don't understand is that pension is income, regardless of who is paying it, therefore it should be taxed where the pensioner is resident.
It's possible that the tax treaty explicitly states that public service pensions will be taxed in the country from which they are paid but has anybody checked?
My father is a retired civil servant (resident in UK) and his pension is taxed at source, based on his annual notice of coding. This code includes tax on the state pension which is not PAYE. In other words, his govt pension has tax deducted from it to cover the tax on the State Pension. If the tax code is NT then surely no tax should be deducted.