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.
April 28, 1981
Kevin J. Donnelly
XXXX
Dear Sirs:
Re: Canada-United Kingdom Income Tax Convention (1978)
This is in reply to your letter of April 6, 1981 concerning Articles 27(4), 10(3) and 28(4) of the above Convention.
We agree with your conclusions on the interpretation of Articles 27(4) and 10(3). In addition we confirm that pursuant to Article 28(4), a Canadian shareholder, subject to Article 28(8), may for the taxation years 1976 to 1980 report United Kingdom dividend income on either a "net" or "gross" basis, whichever is to his advantage. Under the "net" basis the Act "tax credit" would not be included in income by the shareholder and the related foreign tax credit would not be claimed.
Further to your telephone request, it is our view that the tax credit referred to in Article 10(3)(b) of the Convention would be income for Canadian tax purposes in the year the dividend itself is paid.
We trust this is the information you require.
Yours sincerely,
Director Provincial and International Relations Division
cc: J. Hartwick Assessing Division (OA-1240-1)
KJD/jb O.P.R.U. - Canada-United Kingdom Convention Articles 10, 27 and 28
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