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.
January 10, 1979
Provincial and International Relations Division Mr. R.J.L. Read Director
Non-Corporate Rulings Division J.B. Grisé
Canada-U.K. Income Tax Convention (1978)
Thank you for your memorandum of December 27 in which you relate the Department of Finance's suggestion on how we could interpret Article XVII 1 of the above-mentioned Convention in order to tax the lump sum payments from a Canadian pension plan to a United Kingdom pension plan.
As discussed with you, it is doubtful that we can adopt the Finance proposal. It is understood that you may wish to discuss this matter further with Finance officials. In the meantime, we have written to XXXX to indicate that the matter is under study and we will write to him when a decision has been taken.
There seem to be good arguments for accepting the tax-free transfer between Canadian and United Kingdom pension plans. Transfers to a Canadian plan would only be taxable in Canada on the portion of the U.K. plan transferred it the taxpayer decides to reside in Canada while collecting his pension. Double taxing of the pension is avoided. An employee transferring between the two countries on more than one occasion would soon have his pension cut severely by the required tax.
for Director Corporate Rulings Division
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