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.R. Charron
February 22, 1977
RE: Income from the United Kingdom
In response to your letter dated February 7, 1977, we would like to submit the following information in answer to your questions.
a) Presently there is an existing tax treaty between Canada and the United Kingdom that came into force March 23, 1967. Your client being a resident of Canada, must report his world income from the time he became a resident.
b) In accordance with paragraph 48(3) of the Income Tax Act, your client is deemed to have acquired each property which he owned immediately before that time at a cost equal to its fair market value at the time he became a resident. Therefore there is no capital gain or capital loss, until a disposition of property has taken place, after your client has taken up Canadian residence.
c) The annuity payments received by your client after he has taken up residence in Canada are exempt from tax from the United Kingdom, as provided by Article XVI of the Canada-United Kingdom Tax Convention but are taxable in Canada from the date your client has become a resident of Canada.
We would like to add, that if your client is in receipt of income subject to withholding tax in the United Kingdom, a foreign tax credit with be allowed to your client when filing his income tax return. The amount allowed will be the lesser of the foreign tax paid or the Canadian income tax payable on the foreign income reported.
If additional information is needed, please do not hesitate to contact us.
Yours sincerely,
A/Director Provincial and International Relations. Division
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© Her Majesty the Queen in Right of Canada, 1977
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© Sa Majesté la Reine du Chef du Canada, 1977
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