11 April 1984 Income Tax Severed Letter A-9697 - [840411]

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.

A-9697 D.S. Dalorey

April 11, 1984

XXXX

This is in reply to your letter of February 28 concerning the extent of your income tax liability to Canada for the 1983 taxation year.

As you are obviously aware, the extent of an individual's liability to tax in Canada will depend upon his residency status during the period of time in question. As requested, we are forwarding a copy of Interpretation Bulletin IT-221R2 which will assist you in making a determination of that status.

Resident in Canada

If it is concluded that you were factually resident in Canada during the 1983 taxation year, you are required to file an income tax return for that year reporting therein your 1983 world income.

XXXX

From this income, you may claim eligible deductions (including the support payments being made to your wife) to arrive at your net income. From this net income, certain deductions such as the basic personal exemption, the "over 65 years" exemption and the pension income deduction may be deducted in arriving at your taxable income.

Not-Resident in Canada

If it is concluded that you factually were not resident in Canada during 1983, your Canadian tax liability is as follows:

1. XXXX but not the CPP payments or OAS payments, are subject to a 25% Part XIII withholding tax. However, pursuant to Article XVII of the Canada-U.K. Tax Convention, this tax is exigible only on that amount by which the superannuation payments exceed $10,000 or £5,000, whichever is the greater. From the gross income amount mentioned in your letter, it seems reasonable to assume that your superannuation payments in 1983 totalled less than $10,000 and that Part XIII tax is therefore not exigible. If Part XIII tax is being incorrectly withheld, you should notify the payer citing our comments.

2. Alternatively, you may elect pursuant to sections 217 of the Income Tax Act to file a return of income under Part I of the Act. In such a return, you would include all three types of pension income received and deduct therefrom XXXX and other deductions referred to above under the caption Resident in Canada. Enclosed is a copy of Interpretation Bulletin IT-1632 which comments further on this election.

3. Canadian sourced income from property is subject to varying rates of Part XIII tax depending on the nature of the income. For example, interest received from a Canadian source is subject to a 15% rate of withholding tax.

Also enclosed for your use is a copy of the "1983 tax guide and return for individuals Outside Canada".

We trust that the above information is satisfactory for your purposes.

Yours truly,

for Director Non-Corporate Rulings Division

217 Art. XVII U.K. Treaty