28 October 1986 Income Tax Severed Letter 5-2313 - [Article XVII of the Canada-UK Tax Convention—Pension Payments]

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.

K. Harding (613) 957-2129

XXXX

October 28, 1986

This is in reply to your letter of October 7, 1986 concerning pension payments you are receiving from the Commission Administrative des Régimes de Retraite et d'Assurances (CARRA).

Your letter indicates that you have been receiving a pension paid by XXXX.

You stated that no tax was withheld on pension payments prior to this date and you have always paid tax to the U.K. Inland Revenue. You contacted XXXX but have not received an explanation for the change in withholding tax rates.

Article XVII of the Canada-U.K. Income Tax Convention, a copy of which is attached for your perusal, indicates that pensions arising in Canada and paid to a resident of the United Kingdom who is the beneficial owner thereof shall be taxable only in the U.K. Canada is of the view that a pension arises in Canada where such payment is made by a Canadian payor. Accordingly, it would appear that such payments should be exempt from Canadian withholding tax if paid to you on or after April 6, 1986.

We have contacted a XXXX and he indicated that some new procedures for withholding tax commenced in 1986 and that he would review your file and write to you in the near future. He also indicated that when withholding tax is withheld in error that CARRA cannot return the tax to you directly.

The federal tax withheld in error by XXXX can be refunded to you by filing form NR7-R, a copy of which is enclosed, with the Shawinigan Taxation Centre, Shawinigan Sud, Quebec, G9N 7V9. We are also enclosing a copy of Information Circular 77-16R2, paragraphs 65 to 75 outlined the procedures to be followed to obtain a refund of non-resident withholding tax. Paragraphs 68(a) and (b) are applicable to your situation and paragraph 71 explains how the form NR7-R should be completed.

In order to claim a refund of provincial tax withheld, it is necessary for you to contact the government of the Province of Quebec at the address below to determine the procedures to be followed to obtain a refund of such tax.

Mr. Gaston L'Anglais Assistant Director General Revenue Government of Quebec 3800 Marly Street Sainte-Foy, Quebec GlX 4A5

We trust you will be able to resolve this matter in a satisfactory manner.

Yours truly,

for Director Reorganizations and Non-Resident Division Specialty Rulings Directorate Legislative and Intergovernmental Affairs Branch