Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues: A Canadian resident originally from the U.K. is allowed to make additional contributions to the U.K. State Pension Plan ("U.K. Plan") in order to increase the pension he will receive from the U.K. Plan when he reaches 65 years of age. Can he deduct these additional contributions in computing his income for Canadian income tax purposes?
Position: No.
Reasons: There is no provision in the Act that provides for a deduction.
XXXXXXXXXX 2000-004567
G. Kauppinen
September 21, 2000
Dear XXXXXXXXXX
Re: Contributions for Past Years Under the U.K. State Pension Plan
This is in reply to your letter of September 6, 2000 requesting our opinion as to the deductibility, pursuant to the Canadian Income Tax Act, of additional contributions that you are considering making to the U.K. State Pension Plan (the "U.K. Plan"). These additional contributions would increase the amount of your pension under the U.K. Plan when you reach age 65.
There is no deduction available under the Act for contributions made to a U.K. (foreign) pension plan. Nevertheless, you will be required to include in computing your income for Canadian tax purposes all amounts you receive under the U.K. Plan. This is because, as a Canadian resident, you are taxable on your world income. The Canada-U.K. Income Tax Convention (1978) does not provide any relief in this regard.
We trust our comments will be of assistance to you.
Yours truly,
Patricia Spice
for Director
Financial Industries Division
Income Tax Rulings Directorate
Policy and Legislation Branch
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