Tax Free Lump Sum from UK Taxable in Canada?

[ColleenG39]

I am a Canadian who has been living in the UK with my British husband for the past 7 years. I will be moving back to Canada next summer with our children, and my husband will be following in Feb 2013. The issue we are facing is that he receives a lump sum "resettlement grant" upon his retirement from the British Army. This is tax free in the UK. I have been told that as I will already be resident in Canada (hopefully with job and house purchased), he will be considered a "tax resident" of Canada. Therefore his tax free lump sum, earned after 24 years with the army, will be taxable at a rate of approx 40% in Canada. I have also been told that this is regardless of whether he moves to Canada before his lump sum is paid in May 2013 (he is planning on moving there in Feb 2013). Is this the case? Is there any way around this? I have been told that it is possible to move the money directly into a RRSP in Canada, but this would only delay the payment of taxes for a short period as we would have to pay the taxes on it as soon as we decided to withdraw. Ideally as we will be starting over in Canada, we would like to have as much money available to us rather than locking it into an RRSP or offshore account.

Any advice would be appreciated!

[nia]

There is a certain Mr Michael Atlas CA. CPA. TE based in Toronto who is likely to have the answer to this question - eh?
Good luck keeping your $$$ out of Harper's sticky fingers.