Originally Posted by JonboyE

This is an extract from Income Tax ruling 911675. It is quite old – from 1999 – but I cannot find a more recent update.

To summarize, a single amount paid out of a United Kingdom pension plan will be taxable as "pension" in Canada unless it is in settlement of all future benefits under the plan. Accordingly, where a person has elected to receive an initial lump sum payment but not one that was in settlement of all future benefits, the amount will be "pension" pursuant to section 3 of Article 17 of the Convention and may be taxed by Canada pursuant to section 56 of the Act. In this respect, it is irrelevant that the amount may be received tax free by a recipient who is resident in the United Kingdom.

Originally Posted by JonboyE

The CRA official has made a mistake in tax law. 56(1)(a)(i)(C.1) does not say that a pension that is exempt from tax in the country of origin is exempt from tax in Canada. It says that a retirement compensation arrangement that is exempt from tax in the country of origin is exempt in Canada.

Why the nit picking? It is because a retirement compensation arrangement is not the same thing as a pension. Retirement compensation arrangements are defined and specified elsewhere in the Act and Regulations. The only retirement compensation arrangement currently identified as being qualified for this concession is a United States Individual Retirement Account.

Not that it matters to you. Fill your boots.

Originally Posted by dgagitw

Interesting...does that mean that, if you can take the entire UK pension as a lump sum, then it's not taxable in Canada (although it may be in the UK of course)?

Originally Posted by lins and Stef McLachlan

Just to be clear. I have spoken at length to My CRA manager and this has been processed through their legal department, so in their eyes is correct. As with all legislation, one can read into it all sorts of connotations and it is broadly open to the readers interpretation. The only interpretation which matters to CRA is theirs.
Fill my boots, is kind of rude, was it meant that way? I am only trying to help others and at not financial gain to myself. That is what I believe this forum is about.
Stef

Originally Posted by JonboyE

It wasn't intended to be rude. You got a ruling in your favour so it is something to celebrate.

I said up thread that sometimes the CRA choose administrative positions that are not in strict accordance with the law. This appears to be a new one. You are helping others as many will now appeal the initial assessment of their 25%. It will be interesting to see if other tax centres agree.

Originally Posted by lins and Stef McLachlan

Okay
But with it now in Black and white, they have set the precedence, which would be arguable in a court of law.....I am so hoping others now get their money back......that would be something eh?
Stef

Originally Posted by JonboyE

It is taxable, just not as a pension.

Originally Posted by Dailogs

I live in Canada (ex UK) and have a Prudential investment bond which is a single premium life assurance policy. Under this I can receive a regular payment free of UK tax up to a limit of 5% of the amount invested. This I take every month, paid into my UK bank account.
I did not take a lump sum payment, only the monthly withdrawal.

Will this amount be taxed in Canada ?

Originally Posted by lins and Stef McLachlan

It is official. We got a registered letter containing a reassessment dated May 23, 2017. I can send you a couple of pictures of the parts of the letter which are relevant to this, but will need your email as I dont know how to attach docs to this. I also do not want to post this online as it is personal information. You are going to need a letter from your pension provider clearly stating that you did not receive more than 25% as your Tax free lump sum
PM Me your email.....,that goes for anyone else who needs this......Jonboy, this includes you.

I also spoke to HMRC in UK and they said that because it was below the 25% that they were not told of it as there was no tax owing to them, so they had no interest in it and there was nothing they could add of relevance as we never paid any tax in the UK on this amount.
Stef

Originally Posted by Adyted

Stef McLachlan I can't PM you, don't let me. I am new to this, but I will really like more information.

Originally Posted by getoutofbritainquick

I paid a substantial sum to the CRA for my pension lump sum. I will obviously write to them to see what their reply is. If anyone has a formal letter from the CRA with confirmation that this is the case that would be great. I know Johnboy has been a greet source for tax information on this site and this would have massive implications for many of us who has received our pension lunp sums while we were resident in Canada.

Originally Posted by Adyted

Stef McLachlan I can't PM you, don't let me. I am new to this, but I will really like more information.