GMP

Can anyone tell me the rules related to a pension I recieve that is non-taxable in UK. Its an injury/ill health award. Do I declare it in Canada?

Auld Yin

Canadian law dictates that you must declare ALL world income. There may be exceptions/allowances for such as you. One of the sites accountants/experts will probably be along to help you.

JonboyE

The short answer is that it does not matter what the tax status of the pension is in the UK, you pay tax in Canada according to Canadian tax laws. In the vast majority of cases foreign pension income is taxable.

Is it from military service? This could make a difference.

GMP

Its from a police service for an injury on duty

JonboyE

Disability pensions received for injuries suffered while serving in the armed forces in active conflict are tax free in Canada (as long as you were fighting for the good guys). I don't think police service counts, but I'll check into it.

GMP

I appreciate that

JonboyE

The relevant legislation is section 81 of the Income Tax Act. This lists amounts that are not included in income. (You can also look at the CRA's Interpretation bulletin number IT397R.) There is an exemption for disability pensions paid to RCMP officers but, unfortunately, I don't see any exemption for disability pensions paid by foreign police forces. Therefore the pension income is taxable.

If you want to call the CRA to get some information from them the number is 1-800-959-8281.

GMP

Thanks for the information. Looks like I may have to pay.