Government Canada Seniors Benefits
Questions about foreign pension on taxes for Canadian seniors?
My retired father receives a small UK pension 4x a year, paid directly into his bank account. He also receives a small WCB pension and a small private pension from his former employer, as well as nominal OAP and CPP. He receives and reports all the proper forms for the Canadian pensions and government benefits, but he does not receive any slips/receipts (T4, T3, etc.) for his UK pension. My question is threefold:
1) I was under the impression Canada had an arrangement with the UK regarding pensions. Can someone please explain how that works? Is his pension taxed in the UK before he receives it, and therefore he doesn’t pay Canadian tax on it? But he’d still have to report it in any case, right?
2) If he does have to report it, how does he do that without a T4, T3, etc? How does he figure out the total amount and how does he prove the amount is right without the slips/forms?
3) Where (what line) on the Canadian tax form does it go?
Many thanks!
Canada does have a Treaty with the U.K.
Article 17 deals with pensions and annuities. Paragraph 1 states that pensions arising in the U.K. and paid to a resident of Canada are taxable only in Canada. What he should do is take out a piece of paper and add up all the U.K. pension deposits. Pension includes amounts received under social security legislation.
It would be reported on Line 115 of the T1 and fully taxable. It would appear to be eligible income for the pension income credit.
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