Before indicating that foreign tax paid on non-business income may be deductible under s. 20(11) or (12) in computing income for purposes of the Part XI.3 tax on retirement compensation arrangements, CRA stated:
Pursuant to paragraph 149(1)(q.1), no Part I tax is payable on the taxable income of an RCA trust. Consequently, such a trust cannot claim a deduction for tax paid for the year to the government of a foreign country pursuant to subsection 126(1) since this deduction can only be applied against Part I tax payable.