27 November 1985 Income Tax Severed Letter B-6393 - [Part XIII Tax Exemption]

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.

Accounting Division Non-Resident Tax Group

ATTENTION G. McIntyre

Reorganizations and Non-Resident Division A. Jane

RE: Part XIII Tax Exemption Canada - U.K. Article XI-3(b) - "Interest"

XXXX

This is in reply to your round trip memorandum of September 27, 1985 and attachments in regard to the above-captioned matter.

XXXX

You wish our confirmation that the beneficial owner of the Canadian sourced interest income is exempt from Part XIII tax under the Income Tax Act (the "Act") otherwise payable on the gross amounts of interest payable pursuant to sub- paragraph 3(b) of Article XI of the Canada-U.K. Income Tax Convention (1978) (the "Convention").

Provided our understanding of the facts is correct, it is our opinion that the Canadian sourced interest paid in this transaction is interest paid to a resident of the United Kingdom in respect of a credit guaranteed by XXXX Therefore, the interest payable of XXXX in our view qualifies for an exemption under subparagraph 3(b) of Article XI of the Convention from Part XIII tax otherwise payable on that amount under the Act.

for Director Reorganizations and Non-Resident Division Specialty Rulings Directorate Legislative and Intergovernmental Affairs Branch

Article XI, subparagraph 3(b) Canada-U.K. Convention