Claiming IRS credit for pension payments taxed in UK per Tax Treaty

I will see a professional tax authority shortly on this, but was wondering if anyone here knows the answer? 

I am dual citizen retired here in UK, receive US Social Security and pensions from both US and UK, most income is from the US.  Per the 2003 Tax Treaty, pension income is taxed in the country of residence, i.e., UK.  My question is: how do you claim the credit from the IRS for tax paid here in the UK on pensions because of this treaty?  Do you just eliminate it as taxable income on the lines 15a and 16a of the Form 1040? Do you submit a Form 1116 (the instructions for the 1116 list several categories of income, and pensions are not on the list)?

Does anyone have any experience with this?

I will see a professional tax authority shortly on this, but was wondering if anyone here knows the answer?  

I am dual citizen retired here in UK, receive US Social Security and pensions from both US and UK, most income is from the US.  Per the 2003 Tax Treaty, pension income is taxed in the country of residence, i.e., UK.  My question is: how do you claim the credit from the IRS for tax paid here in the UK on pensions because of this treaty?  Do you just eliminate it as taxable income on the lines 15a and 16a of the Form 1040? Do you submit a Form 1116 (the instructions for the 1116 list several categories of income, and pensions are not on the list)?

Does anyone have any experience with this?

Your US Social security is only taxable in the UK. You should receive it with no US tax withheld and leave it off you 1040, but enter it on your UK self assessment form.

Because you are a US/UK dual citizen your pensions are taxable in both the US and the UK. There are different Articles for regular pensions vs Government pensions so you should understand any differences. In Article 1 of the Treaty there is a "Saving Clause" that allows the UK and the US to tax it's residents or citizens as if the Treaty had not come into effect. There are some limited exceptions to this, SS payments being one, but pension payments are not one of those exceptions.

If you are getting pensions from the US your pension administrator will withhold tax according to the rules set out in Form W-4P. The UK will then tax 90% of your US pensions. Now you have to file a Form 1116 (pensions are passive income, but your US pensions should go in category d as they are being resourced, your UK pensions will go in the passive income category) and claim the UK tax paid as a foreign tax credit. You will get a refund of the US tax withheld plus the difference between your UK taxes paid and your US tax liability.
Here is a nice explanation

http://americansabroad.org/files/3913/3589/8026/foreigntaxcreditadams.pdf

Thanks Nun for your response. 

As around 90% of my retirement income is from US pensions, and only around 10% from UK pensions, it seems that being able to "re-source" my US pensions to the UK is key to obtaining a reasonable credit against the taxes I will shortly pay here in the UK.  And as I understand the 2003 Tax Treaty, pensions are taxable only in the contracting country of residence.  Otherwise the ratio calculated in Form 1116 at line 19 will be very small and will drastically reduce the tax credit I can claim, and I will essentially be double taxed, notwithstanding the treaty.

I assume that I will also file a Form 8833 explaining that the pension is being resourced due to the UK-US tax treaty.

And as I understand the 2003 Tax Treaty, pensions are taxable only in the contracting country of residence.  Otherwise the ratio calculated in Form 1116 at line 19 will be very small and will drastically reduce the tax credit I can claim, and I will essentially be double taxed, notwithstanding the treaty.

Your understanding of the Treaty is not correct, you must account for the Saving Clause which allows the US to tax your pensions because you are a US citizen. If most of your income is from US pensions and you resource those to the UK, then your net foreign income on line 17 could be very close to the number on 1040 line 41, depending on the size of your exemptions. Take another look at the example in the pdf link. I think you'll find that if you have resourced your US income to the UK the ratio in line 19 will be close to one.