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.
May 3, 1985
Memo to File
Non-Corporate Rulings Division Mr. R. McColm
XXXX
The taxpayers left Canada and filed a 48(1)(c) election in lieu of paying the departing tax that would otherwise have been payable by them with respect to shares owned by them in the XXXX which vas incorporated and resident in the United States.
As they became resident in the U.K. but not domiciled there, they became subject to income tax therein on the "received basis". While in the U.K. they propose to sell their shares which were held in Canada on their behalf (presumably as security for the election under 48(1)(c)) with the expressed intention of not repatriating the proceeds to the U.K. Thus, they would not have been taxable in the U.K. on the gain resulting from the disposition.
A ruling was requested on their behalf that they would be exempt from Canadian income tax upon the disposition pursuant to Article X111(6) of the Canada-U.K. Income Tax Convention, and that the exemption therein was not restricted by Article XXVII(2) of the Treaty.
We declined to rule. In our view, Article XXVII(2) was particularly applicable in their circumstances and denied them the exemption otherwise available pursuant to Article XIII(6).
Can-U.K. Treaty file
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