From www.icaew.com: (UK context) HMRC updated its international manual with guidance on the tax treatment of lump sum pension payments under the UK’s double tax agreements, clarifying that most payments are taxed only in the recipient’s state of residence.

Some DTAs classify lump sum payments as “other income,” which may result in double taxation, although relief is available through foreign tax credits.

The guidance also specifies criteria for determining what constitutes a lump sum, including the payment amount relative to the pension fund.