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.
July 10, 1985
Accounting and Collections Division
Non-Corporate Rulings Division Glen Thornley 995-2455
A. Watson
Collapse of an RRSP by a non-resident
This is in reply to your memorandum of May 23, 1985 with attachments from the Toronto District Office concerning whether a lump sum payment out of an RRSP is subject to the pension article (Article 17) or the estates and trusts article (Article 20) of the Canada-U.K. Tax Convention (1980) (the Convention). Included with the attachment from Toronto isXXXX.
We are of the opinion that the provisions of Article 20 of the convention do not apply to RRSP or pension payments because the provisions of Article 17 are more specific (covering as they do payments out of a pension plan, an RSSP, or an Annuity). They, therefore, apply to the exclusion of Article 20.
Article 17(1) of the Convention, as revised, states "For the purposes of this paragraph the term "pensions" does not include lump sum payments out of a pension plan." Hence, while Article 17 applies to pensions and RRSP's, it grants relief only with respect to tax on periodic RRSP or pension payments. Tax on lump sum payments out of an RRSP or a pension plan not being granted relief by this Article are subject to the maximum Part XIII tax of 25%.
XXXX
for Director Non-Corporate Rulings Division
Art. 17 & 20 - Can-U.K. Convention Para. 212(1)(1)
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