Saving Clause and Article 5.b

I'm always confused by the "neither nor" logic of Article 5.b applied to the taxation of Government pensions. Lets assume someone is settled in the UK, has strong connections and owns a home there and they receive a US Government pension. If the pensioner is just a US citizen how is this pension taxed?  US tax is due, but is UK tax also due because of the residence status even though the person is not a UK citizen?

I'm always confused by the "neither nor" logic of Article 5.b applied to the taxation of Government pensions. Lets assume someone is settled in the UK, has strong connections and owns a home there and they receive a US Government pension. If the pensioner is just a US citizen how is this pension taxed?  US tax is due, but is UK tax also due because of the residence status even though the person is not a UK citizen?

My (strictly amateur) interpretation: Article 1.5(b) says you can have the treaty benefits granted by Article 19 (host country exemption) if you're neither a citizen nor PR of the host country. 

Therefore, a US Government Pension being paid to a UK resident who is not a UK citizen and has not been granted ILR, is taxable exclusively by the US (the government paying the pension), as per Article 19; the recipient is indeed entitled to host country exemption.

Similarly, a UK Government Pension being paid to a UK resident who is a UK citizen, is taxable exclusively by the UK (the State paying the pension), as per Article 19; in this case, the recipient is not entitled to host country exemption.  Even if the recipient has dual US/UK citizenship, the US can't tax the UK government pension, because Article 19 says a Government Pension is to be taxed exclusively by the State paying the pension if the recipient is not entitled to host country exemption.

My (strictly amateur) interpretation: Article 1.5(b) says you can have the treaty benefits granted by Article 19 (host country exemption) if you're neither a citizen nor PR of the host country. 

Therefore, a US Government Pension being paid to a UK resident who is not a UK citizen and has not been granted ILR, is taxable exclusively by the US (the government paying the pension), as per Article 19; the recipient is indeed entitled to host country exemption.

I agree. I'd also add that if the pension is paid to a EU citizen who has the right to live and work permanently in the UK without the need of a visa then the UK can tax it. If the pension is also a US citizen then the US can also tax the pensions.

Similarly, a UK Government Pension being paid to a UK resident who is a UK citizen, is taxable exclusively by the UK (the State paying the pension), as per Article 19; in this case, the recipient is not entitled to host country exemption.

Agreed.

Even if the recipient has dual US/UK citizenship, the US can't tax the UK government pension, because Article 19 says a Government Pension is to be taxed exclusively by the State paying the pension if the recipient is not entitled to host country exemption.

I don't agree with this one. The saving clause makes Article 19 moot for the US citizen and the US can tax the UK Government pension when paid to a US citizen.

My (strictly amateur) interpretation: Article 1.5(b) says you can have the treaty benefits granted by Article 19 (host country exemption) if you're neither a citizen nor PR of the host country. 

Therefore, a US Government Pension being paid to a UK resident who is not a UK citizen and has not been granted ILR, is taxable exclusively by the US (the government paying the pension), as per Article 19; the recipient is indeed entitled to host country exemption.

I agree. I'd also add that if the pension is paid to a EU citizen who has the right to live and work permanently in the UK without the need of a visa then the UK can tax it. If the pension is also a US citizen then the US can also tax the pensions.

Not sure about EU citizens.  If I'm not mistaken, most EU citizens do not have permanent right of residence - only as long as certain conditions are met each day.  And I suspect the situation could get complicated, as most EU countries probably have separate treaties with the US which would almost certainly have a bearing on the taxing of their US-source income.

An Irish citizen, however, may well be a UK national in addition to being an EU citizen, in which case the pension would be taxable by the UK (only).  IMO

Even if the recipient has dual US/UK citizenship, the US can't tax the UK government pension, because Article 19 says a Government Pension is to be taxed exclusively by the State paying the pension if the recipient is not entitled to host country exemption.

I don't agree with this one. The saving clause makes Article 19 moot for the US citizen and the US can tax the UK Government pension when paid to a US citizen.

Only if the US citizen is also a US resident, IMO - I expect we may just have to agree to disagree on that point.