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HMRC internal manual

International Manual

DT Agreements: Canada - Income from a UK source paid to a resident of Canada

UK pensions and annuities paid to a resident of Canada

Full relief is available under Article 17 in respect of UK pensions paid from bothgovernment and non-government sources.

Full relief extends to pensions paid under social security legislation, under asuperannuation, pension, or retirement plan. This includes annuities which have beenpurchased out of funds saved as tax relieved pension contributions - for example apersonal pension plan (see INTM343160). But it does not include paymentsunder a pension plan in settlement of all future entitlements, such as a ‘lumpsum’ payment.

Annuities which form part of a savings or investment scheme can be relieved down to 10%.It is not intended that you should make enquiries every time you have a claim relating toan annuity. But if you have a claim about an annuity which appears not tohave been purchased to provide a pension, you should refer the file to Technical AdviceGroup.

Article 17 also provides for full relief in respect of alimony, payments from a permanenthealth insurance scheme, and incapacity benefit.