23 March 1988 Income Tax Severed Letter 5-5392 - [880323]

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.

M. Carsley (613) 957-2128

March 23, 1988

XXXX This is in reply to your letter of November 12, 1987 in which you requested some information relating to the tax consequences of investing in a rental property in the U.K.

Any income earned in the U.K. on the rental of real property or on the disposition of such property will be subject to income tax in the U.K. pursuant to Article 6 of the Canada-U.K. Tax Convention and U.K. income tax law. Also, as you are a resident of Canada you must include in your income for Canadian tax purposes your worldwide income which would include any income earned in the U.K. However, to avoid double taxation (taxation of the same income in Canada and the U.K.) you would be able to claim a tax credit or tax deduction, as the case any be, for income tax paid on the rental income in the U.K.

We are enclosing some information on tax treaties and the Canadian foreign tax credit system for your information. You may wish to contact U.K. tax authorities for information on how the rental income would be taxed in the U.K.

If you require any additional information, please do not hesitate to contact us.

Yours truly,

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