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HMRC internal manual

International Manual

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HM Revenue & Customs
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DT Agreements: Canada - Income from a UK source paid to a resident of Canada

UK royalties paid to a resident of Canada (Article 12)

UK royalties payable to a resident of Canada who is the beneficial owner of the royalties are generally taxable in the UK at 10%.

But the convention provides for full relief from UK tax to be given where the royalties are payable in respect of the production or reproduction of any literary, dramatic, musical or artistic work which are beneficially owned by a resident of Canada.

You should note that this does not include royalties in respect of ‘motion pictures and works on film videotape or other means of reproduction for use in connection with television broadcasting’, for which the convention provides no relief. But because of the provisions of ITA07/S907(2) you are unlikely to see any application/claim for relief in respect of this type of income.