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.
XXXXXXXXXX
Dear Sir:
RE: PENSION INCOME AND DOUBLE TAXATION AGREEMENT BETWEEN CANADA AND THE UNITED KINGDOM
This is further to your letter dated March 15, 1993 concerning the above mentioned matter.
We understand from your letter the following:
1. You are a Canadian Citizen who has recently retired from the Canadian public service, and you are receiving periodic pension payments from the Department of XXXXXXXXXX
2. You became a resident of the United Kingdom on XXXXXXXXXX
3. You completed your 1991 Tax return as a non resident of Canada, and paid tax on your Canadian pension income for the entire year of 1991 to the Canadian Government.
4. The British Inland Revenue Department has assessed tax as owing in the United Kingdom with respect to your Canadian pension income for part of 1991, and all of 1992.
5. Your social insurance number is XXXXXXXXXX You have asked us the following three questions;
1. What should you do with the NR4B's you received from XXXXXXXXXX
2. Do you have to file Canadian tax return for Non Residents for your 1992 taxation year?
3. Because you are being taxed by both Canada and Britain on the same income, for the period between XXXXXXXXXX and December 31, 1991 on your Canadian pension income, can you receive back the Canadian taxes paid with respect to this income?
Our Comment
Assuming our understanding of the facts listed above is accurate and complete, we wish to respond to each of your questions as follows;
1. With respect to your NR4B's received from the Department of XXXXXXXXXX, we suggest you use this documentation to substantiate the amount of income received from your Canadian pension for the purposes of reporting your income to British taxing authorities.
2. To determine whether you must file Canadian tax returns for 1992, you must determine whether in addition to your periodic pension income you also have either income from a business carried on in Canada, or whether you disposed of taxable Canadian property, at any time in the year or the previous year. For your information we are enclosing Information Circular IC77-16R4 which discusses non-resident income tax liability on Canadian source income.
3. From your correspondence it appears that you received periodic pension income for the period between XXXXXXXXXX and December 31, 1991 and that this income has been taxed by both the United Kingdom and Canada.
Pursuant paragraph 1 of Article XVII of the Canada-U.K. Income Tax Convention (1978) (hereinafter "Convention) the beneficial owner of periodic payments from pension income arising in Canada but paid to a resident of the United Kingdom, is taxable only in the United Kingdom.
For your reference we are enclosing a copy of Article XVII of this Convention. We have taken the liberty of sending a copy of your letter and a copy of this response to the International Tax Programs office in Ottawa (address shown below) in order for them to determine what adjustments would be appropriate for your 1991 assessment.
In the event withholding taxes have been imposed by the Canadian government with respect to your 1992 pension income, you can apply for a refund of these taxes pursuant to Section 227(6) of the Income Tax Act (copy enclosed). This application should be made to :
Mr. Peter Schrburt, Assistant Director International Taxation Office240 Lancaster Road, Ottawa, Ontario K1A 1A8
We trust these comments will be of assistance to you.
Yours truly,
for DirectorReorganizations and Foreign DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch
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