You can claim a deduction to reduce the taxable amount on income you receive from a foreign pension or annuity that also has an undeducted purchase price (UPP).
Only some foreign pensions and annuities have a UPP. The UPP is the amount you contribute towards the purchase price of your pension or annuity – your personal contributions.
The part of your annual pension or annuity income which represents a return to you of your personal contributions is tax-free. This tax-free portion is the deductible amount of the UPP.
You will need to request a determination of the deductible amount of UPP of a foreign pension or annuity, if you want to know the deduction you can claim for UPP. This applies if you or another person contributed to the purchase price with direct contributions and receive either:
- a foreign pension or annuity
- a foreign pension or annuity that passes to you from the other person.