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The short answer
Under Article 18 of the 1987 UK–Nigeria tax treaty, a pension for past employment paid to a UK resident is taxable only in the country the pension comes from, so a Nigerian pension is generally taxable only in Nigeria, not the UK. Nigeria's 2025 tax law does not tax pensions paid under the Pension Reform Act. Older arrangements linked to employment before April 1979 follow different rules, and you should still show the pension correctly on any UK return.
Many Nigerians who worked for decades at home now live near children in the UK, drawing a pension from a Nigerian pension fund administrator or a government scheme. GOV.UK's general rule is that UK residents pay tax on overseas pensions. The UK–Nigeria treaty changes that for most Nigerian pensions. This guide explains how. It is information, not tax advice.
The starting point: UK tax on foreign pensions
GOV.UK's foreign income page lists overseas pensions among the income UK residents normally pay tax on, usually reported through Self Assessment. Without a treaty, a Nigerian pension paid to a UK resident would be taxed in the UK like any other pension income.
What the treaty says
Article 18 of the UK–Nigeria Double Taxation Convention, signed in 1987, says pensions for past employment and annuities paid to a resident of one country 'shall be taxable only in the State from which such income is derived'. That is unusual: many UK treaties give the right to tax private pensions to the country where the pensioner lives. Under this treaty, the source country keeps it.
| Type of pension | Treaty position | Article |
|---|---|---|
| Private or employer pension from Nigeria, from a Retirement Savings Account or company scheme | Taxable only in Nigeria, the source country | 18 |
| Annuity bought from a Nigerian insurer | Taxable only in Nigeria | 18 |
| Nigerian federal or state government pension | Generally taxable only in Nigeria, the paying country | 18 and 19 |
| Pension linked to employment or obligations before 1 April 1979 (Nigeria) or 6 April 1979 (UK) | Different rules apply; check the treaty text | 18 |
The treaty defines an annuity as a stated sum paid periodically at stated times, for life or a set period, in return for full payment. Lump sums are not covered by that definition, so treat them separately.
How Nigeria treats the pension
The Nigeria Tax Act 2025 took effect on 1 January 2026. Premium Times' list of its exemptions says pensions, gratuities and other retirement benefits granted in line with the Pension Reform Act do not attract tax. Mondaq's summary of the Act also lists pensions and gratuities paid in line with the Act among exempt income. So a pension from your Retirement Savings Account, paid under the Pension Reform Act, is generally not taxed in Nigeria either.
The practical result can be that a Nigerian pension is taxed in neither country. That is how the two laws fit together, not a loophole, but it depends on the pension being of the kind Article 18 covers and paid in line with the Pension Reform Act.
Worked example
Example. Mrs Okafor, 68, retired from a Lagos bank and moved to Leicester in 2024. She receives a programmed withdrawal of ₦250,000 a month from her Retirement Savings Account and a UK State Pension.
- Nigerian pension: ₦3,000,000 a year. Under Article 18, taxable only in Nigeria. As a Pension Reform Act pension, exempt in Nigeria.
- UK State Pension: UK income, taxed in the UK in the normal way.
- Interest on a naira savings account she keeps: not a pension. It is taxable in the UK as foreign interest, with credit for Nigerian withholding.
Her UK tax bill is worked out on her State Pension and other income, not on the Nigerian pension.
Reporting it to HMRC
HMRC's SA106 foreign pages have boxes for overseas pensions (boxes 8 to 9). The pages we read do not set out exactly how to show a pension that the treaty makes exempt. If you file a return, ask HMRC how it wants the Nigerian pension shown, keep the treaty article reference, and keep the pension fund administrator's statements. If your only income is the State Pension and an exempt Nigerian pension, ask HMRC whether you need to file at all.
Lump sums and other payments
Article 18 speaks of pensions and annuities, meaning periodic payments. A lump sum taken from a Retirement Savings Account at retirement, a refund of contributions or a gratuity is not obviously within that wording, and the pages we read do not say how HMRC treats such a payment received by a UK resident. Before you take a large lump sum after moving, ask HMRC or a UK adviser how it will be taxed, and keep the administrator's payment advice showing what the sum was.
Interest earned on pension money after it has been paid into your own savings account is ordinary interest, not pension income, and is treated as savings income in the UK.
Practical steps for the pension itself
- Keep your pension fund administrator's annual statements and payment advices.
- Complete any proof-of-life or data recapture your administrator asks for; our guide to RSA benefits paid abroad covers how payments reach pensioners overseas.
- The Nigeria High Commission in London lists a pensioners' attestation letter among its consular services, at a £20 service charge plus £25 processing on its page as at October 2026; check the current fee before you apply.
- Read our wider guide, is your Nigerian pension taxed where you live?, if you also have family in other countries.
The Mypryme guide to the UK–Nigeria double tax treaty covers the treaty's other articles from the Nigerian side.
Where Pryme fits
A pension paid into a naira account can be held in a Pryme account opened from the UK, alongside pounds, and converted with Swap when you choose. Statements show each payment for your records. See multicurrency accounts.
Questions people ask
Is my Nigerian pension taxed in the UK?
Under Article 18 of the UK–Nigeria treaty, a pension for past employment is taxable only in the country it comes from, so a Nigerian pension is generally not taxed in the UK. Pre-1979 arrangements differ.
Is an RSA pension taxed in Nigeria if I live abroad?
Reports on the Nigeria Tax Act 2025 say pensions paid in line with the Pension Reform Act are not taxed.
Do I still need to tell HMRC about my Nigerian pension?
If you file a return, ask HMRC how to show it; SA106 has overseas pension boxes. Keep the treaty reference and statements.
Is a Nigerian government pension taxed in the UK?
Generally no. Government pensions are taxable only in the paying country under the treaty.
Sources
- GOV.UK: Tax on foreign income (updated 1 Oct 2026) · accessed Oct 2026
- UK–Nigeria Double Taxation Convention 1987 (GOV.UK PDF) · accessed Oct 2026
- Premium Times via AllAfrica: what the new tax laws exempt (3 Nov 2025) · accessed Oct 2026
- Mondaq (Adeola Oyinlade & Co): Personal income tax under the Nigeria Tax Act 2025 (5 Jan 2026) · accessed Oct 2026
- HMRC SA106 Foreign notes 2026 · accessed Oct 2026
- Nigeria High Commission London: Consular services · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.