Section 216

Subsection 216(1) - Alternatives re rents and timber royalties

Cases

Pechet v. Canada, 2009 DTC 5189, 2009 FCA 341

The non-resident taxpayer received rents from Canada in 1997 to 2001 without withholding of Part XIII tax, and in 2002 filed returns under s....

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Words and Phrases
in lieu of

The Queen v. Merali, 88 DTC 6173, [1988] 1 CTC 320 (FCA)

The taxpayer computed his income from a rental property during the 1978-1980 taxation years, while he was a non-resident of Canada, in accordance...

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Arnos v. The Queen, 81 DTC 5126, [1981] CTC 176 (FCTD)

Before going on to find that a non-resident trust (established by a U.S. REIT) was subject to tax with respect to recapture of depreciation...

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MNR v. Bessemer Trust Co., 73 DTC 5045, [1973] CTC 12 (FCA)

Income of a non-resident trust from its interest in real property in Canada, in respect of which it previously had made a s. 216 election,...

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See Also

Pechet v. The Queen, 2008 DTC 3381, 2008 TCC 208, aff'd 2009 FCA 341

The taxpayer was assessed for interest on withholding tax that a tenant of a rental property in Edmonton, Alberta owned by a partnership of which...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 227 - Subsection 227(8.1) interest accrued on retroactively eliminated s. 215 remittance amounts 148

Administrative Policy

7 October 2021 APFF Roundtable Q. 3, 2021-0900911C6 F - Entreprise exploitée par une fiducie

A personal trust resident in Canada (the “Trust”) has a stand-alone operation of renting out Canadian residential and commercial buildings...

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26 November 2020 STEP Roundtable Q. 13, 2020-0847201C6 - GRE & section 216 election

A non-resident individual owning a Canadian rental property had filed T1 returns pursuant to the s. 216 rules. On her death, that property was...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Graduated Rate Estate non-resident estate can be GRE and file s. 216 returns 222
Tax Topics - Income Tax Act - 101-110 - Section 107 - Subsection 107(2) s. 107(2) applicable to distribution by NR estate of Canadian rental property NR residuary beneficiaries 197

13 February 2017 External T.I. 2015-0570011E5 - Compensation by non-resident-loss of rental income

Consistently with the surrogatum principle (or the broad meaning of "in lieu of" per Transocean), CRA found that annual compensation paid pursuant...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 212 - Subsection 212(1) - Paragraph 212(1)(d) compensation paid for lost rent subject to Pt. XIII tax 167

20 June 2005 External T.I. 2004-0095441E5 - subsection 216(1) election on rent receivable

Is a non-resident person that has accrued rental income at the end of a taxation year able to file an s. 216(1) election in that year for that...

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20 September 2002 Internal T.I. 2002-0146627 - Statute barred limits, Section 216S. 216; S. 152(8)

After leaving Canada, an individual filed a Part I return under s. 216(1) reporting only rental income. Assessment of that s. 216 return is now...

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29 July 1997 External T.I. 9638945 - INTERACTION OF SUBSECTIONS 18(4) AND 216(1)

Where a non-resident corporation has elected under s. 216(1), the calculation of its "outstanding debts to specified non-residents" and of its...

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8 November 1996 Internal T.I. 9635527 - INTERACTION SECTION 216 & SECTION 188.94

"The filing of a return of income pursuant to section 216 cannot have any impact on whether or not an individual meets the 'all or substantially...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 118.94 61

14 July 1994 Internal T.I. 9407377 - NON-RESIDENT PARTNER & 216 ELECTION (7558-3)

Brief discussion of application of s. 216 election where there is a non-resident partner in a partnership receiving rents from a MURB property.

Locations of other summaries Wordcount
Tax Topics - Income Tax Regulations - Regulation 805 106

5 January 1993 T.I. 9225705

Two non-resident individuals (A and B) are each a 50% partner of a non-resident general partnership (AB) which, in turn is a 50% partner in a...

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16 July 1991 T.I. (Tax Window, No. 6, p. 14, ¶1350)

Where a non-resident trust which has made the s. 216(1) election receives a lump sum as payment of the entire three-year rent for Canadian...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 9 - Timing 53

9 February 1990 T.I. (July 1990 Access Letter, ¶1341)

The thin capitalization rule in s. 18(4) will have application to a non-resident corporation which makes a s. 216(1) election.

IT-393R "Election re Tax on Rents and Timber Royalties - Non-Residents"

Separate return

3. ...A subsection 216(1) return must include all Canadian source real property rent and timber royalty income that would...

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Articles

Michel Ranger, Rhonda Rudick, "Federal and Provincial Tax Considerations Relating to Non-Resident Investment in Canadian Real Estate", 2019 Conference Report (Canadian Tax Foundation), 32:1 – 39

Tax computation where s. 216(1) election (p. 32-6)

Where a section 216 election is made, income is computed as it is (in the manner set out above)...

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Subsection 216(4) - Optional method of payment

Cases

Osborne v. Canada (Attorney General), 2022 FC 122

Two residents of Bermuda owning a Canadian rental property filed their s. 216 returns nine days after the filing deadline (which was six months...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 220 - Subsection 220(3) CRA decision to not extend a s. 216 return filing deadline, set aside because CRA did not address the taxpayers’ arguments 284

See Also

Stellwaag v. The Queen, 2013 DTC 1106 [at 573], 2013 TCC 111

The taxpayers filed s. 216(4) undertakings in respect of their 2007 taxation year, but did not file returns until 21 July 2013. D'Auray J found...

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Curragh Inc. v. The Queen, 94 DTC 1894, [1995] 1 CTC 2163 (TCC)

In response to a submission that s. 216(4) seems to assume that a Canadian agent of a non-resident will receive rents or royalties on behalf of...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 215 - Subsection 215(1) agent's s. 215(3) liability does not relieve taxpayer's s. 215(1) liability 151
Tax Topics - Income Tax Act - Section 215 - Subsection 215(3) agent liability under s. 215(3) does not relieve principal of laibility under s. 215(1) 151

Administrative Policy

22 July 2014 External T.I. 2014-0520701E5 - Meaning of "any amount" in subsection 216(4)

A Canadian agent remits rent to a non-resident who owns rental property in Canada. They have filed an NR6. Rental property expenses are paid both...

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7 February 2014 Internal T.I. 2013-0506151I7 - Section 216 returns and interest

After an agent of a non-resident was assessed for failing to withhold and remit Part XIII tax on rental collections paid to the non-resident as...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 227 - Subsection 227(8.3) accrual of interest until filing of s. 216(4) return 189

T4061 NR4 - Non-Resident Tax Withholding, Remitting, and Reporting - 2015

Although we accept Form NR6 throughout the year, the effective date for withholding on the net amount will be the first day of the month in which...

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T4144 "Income Tax Guide for Electing Under Section 216 - 2015"

You should send us Form NR6 on or before January 1, of each year, or before the first rental payment is due. Your agent must continue to withhold...

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27 March 2013 External T.I. 2012-0450491E5 - Election under s. 216

Where a Canadian-resident tenant pays rent to a partnership having one or more non-resident partners, those non-residents may elect under s....

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 212 - Subsection 212(13.1) - Paragraph 212(13.1)(b) full withholding on rents paid to non-Canadian partnership with some resident partners 50

19 January 2012 External T.I. 2011-0414341E5 F - Déf revenu brut location Partie XIII

A Canadian-resident "Manager" agrees to provide rental management services to the non-resident owner (the "Owner") of an immovable located in...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 212 - Subsection 212(1) - Paragraph 212(1)(d) agent-manager required to withhold on gross rent rather than net rent remitted absent s. 216(4) election 246

13 April 2005 Internal T.I. 2004-0109071I7 F - Partie XIII et revenus locatifs

A property manager agreed with the owners of condos, including the non-resident owner in question, to rent out the condo on behalf of the owner,...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 215 - Subsection 215(3) property manager required to withhold on the gross rents collected absent a s. 216(4) election 83

90 C.R. - Q60

The Canadian agent must undertake to file a return and pay the balance of tax should the non-resident fail to do so, but there is no requirement...

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89 C.M.TC - Q.18

Non-cash items such as CCA are not eligible deductions. The reduction in withholding will only take effect from the date the NR6 is received.

87 C.R. - Q.89

Non-cash expenses, such as CCA, are not eligible deductions, whereas normal non-capitalized expenses relating to repairs, property taxes,...

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86 C.R. - Q.83

The required deductions and remittances may not necessarily be based on 1/12 of the net rental, but may depend on the amount available to the...

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81 C.R. - Q.48

Where the Canadian lessee signs the form NR6 as agent of the non-resident, thereby agreeing to pay any tax liability should the non-resident not...

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Articles

Jack Bernstein, "Nonresident Investment in Canadian Real Estate", Tax Notes International, Vol. 31, No. 3, 21 July 2003, p. 249.

Forms

NR6 - Undertaking to File and Income Tax Return by a Non-Resident Receiving Rent from Real or Immovable Property or Receiving a Timber Royalty for...

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Subsection 216(5) - Disposition by non-resident

Cases

Deitcher v. The Queen, 79 DTC 5415, [1979] CTC 500 (FCTD)

The recapture of depreciation that is included in income under what is now s. 216(5) includes depreciation that was claimed by the non-resident...

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