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....
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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|---|---|---|
| Tax Topics - Income Tax Act - Section 111 - Subsection 111(1) - Paragraph 111(1)(a) | 50 | |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Taxpayer | nexus to Ccn source | 28 |
| Tax Topics - Statutory Interpretation - Ordinary Meaning | 64 |
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...
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,...
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...
| 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
11 September 2017 External T.I. 2017-0706851E5 F - Changement partiel d'usage - Immeuble locatif
Shortly after immigrating to Canada, a non-resident individual, who had been renting out the three identical units in a Canadian triplex and...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 45 - Subsection 45(1) - Paragraph 45(1)(c) - Subparagraph 45(1)(c)(i) | partial change-of-use rules applied when a non-resident with a s. 216 rental triplex immigrates to Canada and moves into one of the units | 159 |
20 June 2023 STEP Roundtable Q. 11, 2023-0971841C6 - Non-Resident Owning Canadian Rental Real Estate
An s. 216 election must be made by filing a special income tax form T1159 within either 6 months or 24 months of the end of the year (6 months if...
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...
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...
| 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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|---|---|---|
| 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...
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...
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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|---|---|---|
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(4) | 60 |
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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|---|---|---|
| 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.
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|---|---|---|
| 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...
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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|---|---|---|
| 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...
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)...
Paragraph 216(1)(a)
Articles
Ken Griffin, "The EIFEL Rules and Section 216 Filers", International Tax Highlights, Vol. 2, No. 1, February 2023, p. 7
Consequences of treating s. 216 filer as resident under draft EIFEL rules (p. 7)
- It is uncertain whether a s. 216 filer will be a person resident...
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...
| 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...
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...
| 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...
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...
| 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...
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...
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....
| 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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|---|---|---|
| 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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|---|---|---|
| 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...
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,...
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...
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...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Regulations - Regulation 105 - Subsection 105(1) | 21 |
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...
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...