The latest United Kingdom-United States income tax treaty contains a significant development for pension schemes. For the first time, Art. 10 (Dividends) helps enable US dividends to be paid to UK-based pension schemes without deduction of tax. On the surface, this was a very positive development, but insurance companies and investment managers were concerned that it would put established UK pooling arrangements at a disadvantage compared to direct investment and US-based vehicles. The Competent Authority Agreement of April 2005 (the Agreement), the product of at least four years of intense lobbying by the insurance and investment management industries, is designed to remove this disparity. This article examines the Agreement.