Black – Federal Court of Appeal affirms a finding that Treaty residence in the U.K. did not stop CRA from treating Conrad Black as a Canadian resident

In 2002, Conrad Black was resident in Canada under general principles but was resident in the U.K for Treaty purposes under the tie-breaker rules.  He made an unsuccessful argument before Rip CJ to the effect that s. 250(5) (which was not yet applicable to him) was enacted for greater certainty, so that (it was argued) he was deemed because of his Treaty status not to be resident in Canada. Accordingly, Conrad Black was subject to Canadian tax on his world-wide income.

If he instead had been successful on this argument, he would have faced a further difficulty in Art. 27, para. 2 of the Treaty, which provided that income, which otherwise was "relieved" from Canadian income tax under the Treaty but was subject to tax in the U.K. only on a remittance basis, would only be subject to such relief to the extent it was so remitted. Rip CJ found that this provision was not restricted to income which arose in Canada, so that it would have permitted Canada to tax Black’s U.S.-source employment income (which had not been remitted to the U.K.)

This decision has been briefly affirmed, including the Art. 27 findings.

Neal Armstrong.  Summary of Black v. The Queen, 2014 DTC 1046 [at 2882], 2014 TCC 12, briefly aff’d 2014 FCA 275, under Treaties – Art. 4, Art. 29, Stat. Interp. – Other/Conflicting Statutes, and Interp. Act - 45(2).