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 7, 1971
Rulings Division N.M. Sheerin
Re: Residential Status for the purpose of Article 3 of the Canada-United Kingdom Income Tax Agreement
We have recently been requested by your son, XXXX to provide you with a statement of our opinion as to your residential status should you be faced with a situation of double taxation. We understand that your English legal advisers are of the opinion that you may be considered a resident of the United Kingdom and therefore liable to U.K. income tax, if you decide to visit your husband at his home in England, even for a short period.
Assuming that such a situation may arise (and we are not in a position to say whether or not it could), the problem of double taxation would have to be resolved on the basis of the rules and conditions set out in Article 3 of the Canada-United Kingdom Income Tax Agreement, since you are considered to be a resident of Canada for Canadian income tax purposes at the present time.
XXXX has summarised the facts of your present circumstances in a letter submitted during an interview at this office on May 3, 1971 (a copy of which is attached).
On the basis of the facts outlined in that letter and applying the rules of Article 3 to your case, it is our view that as at the present time, you should be considered a resident of Canada only.
We have reached this conclusion for the following reasons:
1. Article 3(2)(a) states that a person who is considered to be a resident of two countries for income tax purposes shall be deemed to be a resident of the country in which he has a permanent home available to him. In your case, you have a permanent home available to you in Canada and on the basis of this test, it is our view that you should be deemed to be a resident of Canada.
2. On the other hand, in view of your husband's house in England also being available to you, it is possible that you might be considered to have a permanent home in that country as well. We must therefore go on to consider the second test mentioned in Article 3(2)(a), that is, where a person has a permanent home available in both countries, he shall be deemed to be a resident of the country with which his personal and economic relations are closest, in other words, the country which is his "centre of vital interests". In your case, in view of the fact that your children and mother live in Canada and, as outlined in the attached letter, that you feel it necessary to be in Canada a good part of the year to be near them - in addition to the fact that your source of investment income is in Canada, it is most probable that your centre of vital interests within the meaning of Article 3(2)(a) is Canada. It is our opinion that on the basis of this test, you would be deemed to be a resident of Canada.
3. However, due to the fact that your husband resides in England, it might be argued that your centre of vital interests is in that country. Article 3(2)(b) states that where the country in which a person has his "centre of vital interests" is not capable of being definitely ascertained, a person shall be deemed to be a resident of the country in which he has an habitual abode. In your case, based on the facts presented to us, it is our view that your habitual abode is in Canada, and that in accordance with the rule in Article 3(2)(b), you would be deemed to be a resident of Canada.
4. Article 3(2)(c) provides that if the test as to habitual abode proves inconclusive, a person shall be deemed to be a resident of the country of which he is a national. Since you are a Canadian citizen and national and provided you are not a national of the United Kingdom, in our view you would be deemed a resident of Canada on the basis of Article 3(2)(c).
Yours faithfully,
Original Signed by
Director Rulings Division Legislation Branch
NMS/tm
378-1
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