10 February 1982 Income Tax Severed Letter A-6091 - [820210]

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.

February 10, 1982

A-6091

W.C. Pembroke 995-0051

Dear XXXXXXXX

We have enclosed a copy of our Interpretation Bulletin IT-2218 for your perusal. As indicated by its title "Determination of an Individual's Residence Status", this bulletin provides guidelines to assist in determining if a person would be considered a non-resident of Canada while absent from the country.

Based upon our understanding of your particular circumstances that are partially laid out above we will give our opinion on the questions raised in your letter bearing in mind that all the facts of your case are not as yet established.

1. Your income from the XXXX would not attract taxation in Canada provided you could be considered a non-resident of Canada in accordance with IT-221R . In your case, it is very likely you would be considered a non-resident if out of the country for more than two years and considered to have severed all your residential ties.

2. Assuming that you are not taxable in Canada as a resident of Canada, you would be subject to non-resident withholding tax cm the rental income received from your house in Canada under the provisions of paragraph 212(1)(d) of the Income Tax Act. However, an elective return may be filed pursuant to section 216 of the Act that gives a non-resident the option of filing a return and paying tax under Part I as though he were a resident of Canada. This elective provision is explained in more detail in our Interpretation 3ulletin IT-393 , a copy of which is enclosed, which deals with section 216 elections.

3. Interest paid or credited to non-residents is subject to withholding tax under Part XIII of the Act, in particular, paragraph 212(1)(b) thereof.

4. Assuming that you are anon-resident while in XXXX a lump sun received out of the XXXX would not be taxed in unless it is received by you after yo become a resident of Canada. In the latter case, you may be eligible to roll-over all or a portion of same into your XXXX pension plan.

Based upon our views given under 1. and 2. above, a response to your queries numbered 3, 4, 5, 6 and 7 is either unnecessary or already provided.

We emphasize that we are not saying definitely whether you will or will not be a resident of Canada while in XXXX. We say this because certain of the facts which may or may not be crucial to the determination are not known at this time.

Should any additional information be necessary, please contact our District Taxation Office at 36 Adelaide St. E. in Toronto. The telephone number is 864-1500.

Yours truly,

ORIGINAL SIGNED BY ORIGINAL SIGNÉ PAR D.S. DELOREY

for Director Non-Corporate Rulings Division Rulings Division