JonboyE

From the website you linked to. My bolding.

amounts paid by Canada or an ally (if the amount is not taxable in that country) for disability or death due to war service;

It is a special exemption for people injured in active combat. The OP was a copper.

IT-365R2 refers to an award of special or general damages. I.e. amounts awarded by a court.

I don't see anything that suggests a disability pension paid by a foreign police force is exempt form income tax.

Edna Bucket

The first link I posted was in reply to Almost Canadian as he was referring to his war pension.

IT365R2 refers to amounts received as the result of a claim for damages. It does not say that the award has to be made by a court. Many police officers who become injured on duty do in fact sue their employers and Stuarty may be one of them but it is not necessary to have done this.

JonboyE

I suspect that AC is perfectly capable of reading the relevant legislation and drawing the appropriate conclusions.

If you sue an employer and are awarded a settlement I agree that this may not necessarily have to be included in income. However, there is nothing in the OP's posts to suggest this is the case. The tax status of the OP's disability pension in the UK is irrelevant in Canada except in the circumstances we have already discussed.

You state "Also if income from the UK is not taxable then it is not taxable in Canada either." Unfortunately, except in some very limited circumstances, this is simply not true.

Almost Canadian

What the British Army calls a war pension and what the legislation in Canada deems to be a war pension are very different things. It would appear that, to qualify as a war pension in Canada, one must have obtained it as a result of active service in WWI or WWII. While I am getting on a bit, I don't believe that either of my parents were born at the time of WWII.

Stuarty would not have received a pension as a result of suing his employer. Damages and pensions are very different beasts.

JonboyE

For the sake of completeness this is from the Income Tax Act:

56.
(1) Amounts to be included in income for year -- Without restricting the generality of section 3, there shall be included in computing the income of a taxpayer for a taxation year,

(a) pension benefits, unemployment insurance benefits, etc. -- any amount received by the taxpayer in the year as, on account or in lieu of payment of, or in satisfaction of,

(i) a superannuation or pension benefit including, without limiting the generality of the foregoing,

(A) the amount of any pension, supplement or spouse's or common-law partner's allowance under the Old Age Security Act and the amount of any similar payment under a law of a province,

(B) the amount of any benefit under the Canada Pension Plan or a provincial pension plan as defined in section 3 of that Act,

(C) the amount of any payment out of or under a specified pension plan, and

(C.1) the amount of any payment out of or under a foreign retirement arrangement established under the laws of a country, except to the extent that the amount would not, if the taxpayer were resident in the country, be subject to income taxation in the country,

On first reading this I noticed paragraph C.1 and thought Ah Ha! However, I looked in section 248 (1) for a definition of a foreign retirement arrangement and found that a foreign retirement arrangement is a prescribed plan or arrangement. Regulation 6803 limits a prescribed arrangement to one made under the laws of the United States of America.

Therefore any pension or retirement arrangement that arises under UK law is taxable in Canada unless it is exempted elsewhere in the act.

Edna Bucket

What a bummer! You served your country and are no less deserving than those other older veterans.

[QUOTE=Stuarty would not have received a pension as a result of suing his employer.[/QUOTE]

I agree. Jonboy said that that was an example of how damages would be arrived at but most cases are settled out of court. It would be irrelevant anyway if the employer provided the disability/injury "pension" due to the fact that the incident led to the injury/disability occurring on duty.

[QUOTE=Damages and pensions are very different beasts.[/QUOTE]

Exactly! I placed the word pension in inverted commas. Although the monthly disability/injury payment is called a pension it can be withdrawn (for example if the recipient's condition has improved) Some police forces were planning to withdraw these kinds of payments when the recipient reached age 65, but I don't know whether they actually did.

Stuarty

Some forces are still planning it to save money. Delightful policy that is designed to effect most, those who are in not in a position to defend themselves. Hopefully sanity will prevail and re-assessment required first. In 2003/4 new safeguards were put in place to ensure accurate assessments in the first place...stopping now as I feel a rant coming on and none of it will help my tax crisis.

joepublic

I'm in the process of filling in this form and I'm trying to decipher whether it's a 'Yes' or 'No' for the following question:

Part B Q.6 'Is Canadian tax on the income that is included in this form calculated by reference to the amount remitted to or received in Canada?'

The 'income that is included in this form' is my military pension, which is currently being taxed at source in the UK, hence why I'm filling in this form to claim the UK tax back and have it paid gross. I have recently declared this income on my first tax return and therefore it is liable for Canadian tax. As I understand it it makes no odds whether my pension is 'remitted or received in Canada' because I have to declare it as worldwide income regardless and therefore pay Canadian tax on it. To that end, I am guessing that I should put 'Yes' against this question?

Can anyone shed any light, ta?

JonboyE

I think it is asking if you report this income on your Canadian tax return gross or net of UK tax. Hopefully the answer is no - i.e. you report the gross pension on your Canadian tax return.

If you claim a refund from HMRC you cannot get a foreign tax credit for the tax deducted in the UK.