Income Tax Severed Letters - 2000-09-29

Miscellaneous

22 August 2000 1999-000915A - Pay Equity - Estates

Unedited CRA Tags
70(1) 70(2) 3 5(1)

Principal Issues: Where employees or former employees of the federal government died after obtaining a determinable right to pay equity wage adjustment as determined by the Canadian Human Rights Tribunal in 1999:
1. Whether pay equity wage adjustments will be taxable in the hands of former employees pursuant to subsection 70(1) or (2)?
2. Whether interest payable in respect of pay equity wage adjustments will be taxable in the hands of former employees pursuant to subsection 70(1) or (2)?

Position:
1. 70(2).
2. 70(2) to the extent the interest became payable on or before date of death.

Reasons:
1. At the time the employees' right to pay equity wage adjustments became determinable (1999), the wage adjustments pertained to 1998 and earlier years.
2. Interest is payable semi-annually (March 31 and September 30) until an employee's wage adjustment has been paid. The interest becomes payable on those dates only if the wage adjustment has not been paid by then.

2000 2000-0034951 - Foreign merger

Unedited CRA Tags
87(8.1)

Principal Issues: Whether there is a disposition of assets by a corporation which survives an absorptive foreign merger.

Position: No

Reasons: The surviving corporation does not cease to exist.

2000 2000-0040241 - TRANSFER FROM 401(K) TO IRA TO RRSP

Unedited CRA Tags
60(j)

Principal Issues: Amend the proposed transactions described in Ruling Letter 2000-001463?

Position: Yes.

Reasons: The taxpayer will determine the amount of his IRA that will be transferred to an RRSP.

Ruling

2000 Ruling 1999-0011213 - public corporation spin-off

Unedited CRA Tags
55 256

Principal Issues: Whether there is an acquisition of control following a share-for-share exchange XXXXXXXXXX

Position: There was no acquisition of control

Reasons: XXXXXXXXXX. Control for purposes of 256(7)(c) means de jure control.

2000 Ruling 2000-0028423 - partnership dissolution under 98(3)

Unedited CRA Tags
98(3) 53(1)(e)(i)
Summary Under
Tax Topics - Income Tax Act - Section 53 - Subsection 53(1) - Paragraph 53(1)(e) - Subparagraph 53(1)(e)(iv)
Summary Under
Tax Topics - Income Tax Act - Section 53 - Subsection 53(1) - Paragraph 53(1)(e) - Subparagraph 53(1)(e)(iv)
Summary Under
Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Real Estate
capital property retained that character on s. 98(3) wind-up
Summary Under
Tax Topics - Income Tax Act - Section 98 - Subsection 98(3)
0% undivided interest

Principal Issues:
1. capital or income gain on sale by partners after 98(3)?
2. can 98(3) apply where one partner's capital interest in the partnership is 0%?
3. does admin position re 53(1)(e)(i) apply?
4. does GAAR apply?

Position:
1.capital gain
2. yes, if all partners elect
3. yes
4. no

Reasons: see Issue Sheet
1. capital property of partnership; immediate dispositions by partners of their interests in partnership property will not transform nature of gain
2. 98(3) applies if all partners elect; no prohibition re 0% capital interest
3. Avoid double tax
4. transactions arranged for other than tax purposes; no misuse / abuse

2000 Ruling 1999-0013143 - 21-Year Rule - Trusts

Unedited CRA Tags
104(4) 75(2)

Principal Issues: Complete reorganization in order to mitigate tax consequences of the 21 year deemed disposition rule. As minor & unborn children were involved the value of the contingent capital interests were determined & set aside in a separate trust.
See Issue sheet for complete list of all issues as transactions were modified several times

Position:

Reasons:

2000 Ruling 2000-0030463 F - Société d'État à 90%

Unedited CRA Tags
149(i)d.1)

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

PRINCIPALE QUESTION

La société va-t-elle être exempte d'impôt en vertu de l'alinéa 149(1)d.1) de la Loi, si elle détient plus de 90% de toutes les actions émises et moins de 90% des actions ordinaires?

Position Adoptée

Oui.

RAISON POUR POSITION ADOPTÉE

2000 Ruling 2000-0023953 - Foreign merger

Unedited CRA Tags
87(8.1)
Summary Under
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Disposition
no disposition by corporation surviving the merger

Principal Issues: Whether a vertical merger qualifies as a foreign merger under subsection 87(8.1)

Position: Yes

Reasons: Existing position.

2000 Ruling 2000-0038423 - AVOIDANCE OF PROHIBITION

Unedited CRA Tags
249(3)(d) 245(2) 75(2) 104(6)

Principal Issues:
The XXXXXXXXXX is proposing to undertake a series of transactions that involve a trust structure in an effort to avoid the specific rule on incurring debt in paragraph 149.1(3)(d) and the issue is; will GAAR apply to this avoidance transaction?

2000 Ruling 2000-0014443 - PUC Reduction

Unedited CRA Tags
84(2)
Summary Under
Tax Topics - Income Tax Act - Section 84 - Subsection 84(2)

Principal Issues: Whether a distribution of property on a PUC reduction by a public company is subject to the provisions of subsection 84(2).

Position: Yes.

Reasons: The distribution of property is done on a reorganization of XXXXXXXXXX/Opco's business.

2000 Ruling 2000-0038873 - Affiliated Group Loss Utilization

Unedited CRA Tags
20(1)(c)

Principal Issues: Affiliated group loss utilization scheme

Position: Similar to prior rulings issued

Reasons: Similar to ATR 44

2000 Ruling 2000-0022473 - FLEX BENEFIT PROGRAMS

Unedited CRA Tags
6(1)a)

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

XXXXXXXXXX
XXXXXXXXXX 2000-002247
XXXXXXXXXX

Attention: XXXXXXXXXX

XXXXXXXXXX, 2000

Dear Sirs:

Re: Advance Income Tax Ruling
Flexible Benefit Plan
XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXXX

2000 Ruling 2000-0040653 - Canadian FIlm or Video Production Tax Credit

Unedited CRA Tags
125.4 87(2)(j.94) 88(1)(e.2) reg.1106(2)

Principal Issues:

Will the amalgamation of a production subsidiary into its parent, followed by (i) a section 85 roll of amalco's shares by amalco's parent corporation into another subsidiary and (ii) a wind-up of amalco into this latter subsidiary, result in the application of the investor rules or the excluded production rules to deny the Canadian film or video production tax credits previously claimed?

Position:

Not in and of themselves.

Reasons:

2000 Ruling 2000-0028333 F - Allocation de retraite

Unedited CRA Tags
248(1) 60(j.1) 9(1)

Principales Questions: Le contribuable a-t-il droit de transférer à son REER le montant d'allocation de retraite qu'il reçoit de son employeur?

Position Adoptée: Oui, car les montants rencontrent les limites prévues à l'alinéa 60(j.1) de la Loi.

2000 Ruling 2000-0041303 - RETIRING ALLOWANCE INSTALMENTS

Unedited CRA Tags
60(j.1)

Principal Issues: Will a series of payments from a taxpayer's former employer qualify as a retiring allowance for purposes of the Act?

Position: Yes.

Reasons: The payments are being received in respect of the taxpayer's loss of office or employment.

2000 Ruling 2000-0028343 - Foreign Prop. held by Registered Investment

Unedited CRA Tags
108(2)(b)(v)
Summary Under
Tax Topics - Income Tax Act - 101-110 - Section 108 - Subsection 108(2) - Paragraph 108(2)(b)
splitting up US investment through separate holdcos

Principal Issues:
1. Will the interposition of a foreign holdco between a Canadian holdco and foreign properties affect the ruling given in file 1999-001279 that as long as the investment by the trust in shares and debt of the Canadian holdco is less than 10% then subparagraph 108(2)(b)(v) will not be offended? 2. Will the favourable GAAR ruling be affected?

Position:
1. No. 2. No.

Reasons:
1. The test in subparagraph 108(2)(b)(v) is with regard to the property owned directly by the trust. Subparagraph 108(2)(b)(v) is limited to the first tier of investment. 2. The issues considered with respect to the GAAR ruling are not affected by the additional transaction.

1999 Ruling 9908203 - 6801(D), PHANTOM STOCK PLAN, DIRECTORS

Unedited CRA Tags
6801(d)

Principal Issues: Can they implement a standard phantom stock plan for the directors of the corporation?

Position: Yes

Reasons: Meets 6801(d)

1999 Ruling 9909163 - STOCK OPTION EXCHANGE, DELAY EXERCISE RIGHTS

Unedited CRA Tags
7(1.4)

Principal Issues: Will an exchange of stock options as a result of a corporate merger meet subsection 7(1.4) where the rights to exercise the options are suspended for a period because of a previous corporate demerger and the number of shares to be issued under the option agreement is dependent upon the structure of the demerger transaction?

Position: Yes

Reasons: The provisions of subsection 7(1.4) are satisfied. The employee's rights during the interim period continue to be an agreement to issue shares for the purposes of section 7 and the value for value requirements of paragraph 7(1.4)(c) are met.

1999 Ruling 9924123 - CORPORATE GROUP LOSS UTILIZATION SCHEME

Unedited CRA Tags
20(1)(c)

Principal Issues: Corporate Group Loss Utilization Scheme

Position: Similar to 3-963328

Reasons: n/a

1999 Ruling 9924923 - INTEREST DEDUCTIBILITY

Unedited CRA Tags
20(1)(C)

Principal Issues: Deductibility of funds borrowed to pay dividends.

Position: Okay.

Reasons: Satisfies the retained earnings test.

1999 Ruling 9902593 - STOCK OPTIONS - CASH-OUT RIGHT

Unedited CRA Tags
7(1)(b) 6(1)(a) 110(1)(d) 15(1)
Summary Under
Tax Topics - Income Tax Act - Section 7 - Subsection 7(3) - Paragraph 7(3)(b)
use of employee bond to acquire foreign parent share at initial value
Summary Under
Tax Topics - Income Tax Act - Section 7 - Subsection 7(1) - Paragraph 7(1)(b)
cash surrender of subscription rights for unlisted shares
Summary Under
Tax Topics - Income Tax Act - Section 15 - Subsection 15(1)

Principal Issues:

(a) Does the addition of a cash out option result in the disposition of rights under an existing stock option plan?
(b) Does the payment of the cash out amount by the employees employer rather than the foreign parent company in respect of which the stock options are issued constitute the conferral of a benefit by the Canadian employer on the foreign parent?

Position:

(a) The addition of the cash out right is not a fundamental change to the plan such that no disposition of rights occurs
(b) The payment described in the ruling does not constitute the conferral of a benefit.

Reasons:

1999 Ruling 9928863 - XXXXXXXXXX - FORWARD CONTRACTS

Unedited CRA Tags
206(1) reg 5000(1), (2),(5)

Principal Issues:
Issue 1- does the proposed mutual fund qualify as foreign ppty?
Issue 2- are the underlying funds "mutual fund trusts" for purposes of the Act?
Issue 3-what is the cost amount of the forward contract?
Issue 4- is the forward contract foreign property?

Position:
Issue 1-no
Issue 2- yes
Issue 3-cost amount=brokerage,legal +incidental but not any amount paid on margin, N/Apmts paid pursuant to the contract etc.
Issue 4- no

Reasons:
issue 1-contract is structured so that none of underlying property can be acquired
issue 2-underlying funds will be mutual fund trusts as soon as 150 investors are obtained
issue 3-where fund is required to pay costs ( ie legal, brokerage, incidental) they will form part of cost amt.
issue 4-similar rulings wrt 991458 &991541

1999 Ruling 9906593 - CONSOLIDATION TO USE DEDUCTIONS AND CREDITS

Unedited CRA Tags
20(1)(c) 245(2)

Principal Issues: Use of Deductions and Credits by Affiliated Persons

Position: ok

Reasons: Previous rulings

1999 Ruling 9931593 - INTEREST DEDUCTIBILITY

Unedited CRA Tags
20(1)(c)

Principal Issues: Amendment to facts and proposed transactions.

Position: Okay.

Reasons: Does not affect the ruling given (file # 992492).

1999 Ruling 9906933 - MUTUAL FUNDS

Unedited CRA Tags
104(6)b) 104(24) 4801(a) 104(13) 54

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

XXXXXXXXXX 3-971404 / 3-990693

Attention: XXXXXXXXXX

XXXXXXXXXX, 1999

Dear Sirs/Madams:

Re: Advance Income Tax Rulings
XXXXXXXXXX

1999 Ruling 9917393 F - ACTIONS CONVERTIBLES

Unedited CRA Tags
110.6(8)

Principales Questions:

Est-ce que le paragraphe 110.6(8) de la Loi s'appliquera lors de la disposition par les contribuables de leurs actions pour refuser la déduction pour gains en capital à l'égard d'actions admissibles de petite entreprise si la société n'a pas toujours versé de dividendes sur des actions prescrites et non prescrites qu'elle a émises?

Position Adoptée:

1998 Ruling 9829053 - REORGANIZATION TO SIMPLIFY SHARE STRUCTURE

Unedited CRA Tags
55(3)(a)

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

XXXXXXXXXX
XXXXXXXXXX 					1-982905
XXXXXXXXXX

Attention: XXXXXXXXXX

XXXXXXXXXX, 1998

Dear Sirs:

1998 Ruling 9830573 - BUTTERFLY REORGANIZATION

Unedited CRA Tags
55(3)(b) 88(2)(b)(i)

Principal Issues: Butterfly transfer - see issue sheet

Position: see issue sheet

Reasons: see issue sheet

1998 Ruling 983057A - BUTTERFLY REORGANIZATION

Unedited CRA Tags
55(3)(b)

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

XXXXXXXXXX
XXXXXXXXXX 3-983057
XXXXXXXXXX

Attention: XXXXXXXXXX

XXXXXXXXXX, 1998

Dear Sirs:

Re: XXXXXXXXXX
Advance Income Tax Ruling
on our file number 3-983057

1998 Ruling 9819913 - STOCK OPTION PLAN - CHANGE OF FACTS

Unedited CRA Tags
7

Principal Issues: Additional facts - replacement of phantom stock plan with a stock option plan - add provision to contemplate that stock price has decreased after phantom stock were issued.

Position: No impact on rulings provided.

Reasons: New stock option plan allows for strike price to be greater than current fmv. Still a section 7 plan.

1998 Ruling 9821903 - RETIRING ALLOWANCE - RETIREMENT DATE

Unedited CRA Tags
248(1) 60(j.1)

Principal Issues: A) Would an amount be considered a retiring allowance;
B) Would the employee be entitled to a deduction under paragraph 60(j.1) of the Act;

Position: Yes.

Reasons: In accordance with the Act and guideline provided in Question 10 at the 1992 Prairie Tax Conference Round Table and prior rulings given.

1998 Ruling 9827993 - REORGANIZATION TO SIMPLIFY SHARE STRUCTURE

Unedited CRA Tags
55(3)(a)

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

XXXXXXXXXX
XXXXXXXXXX 						1-982799
XXXXXXXXXX

Attention: XXXXXXXXXX

XXXXXXXXXX, 1998

Dear Sirs:

Re: XXXXXXXXXX
XXXXXXXXXX
Advance Income Tax Ruling

1998 Ruling 9828893 - 6801(D) PLAN

Unedited CRA Tags
6801(d)

Principal Issues:
Whether arrangement is exempted from SDA definition by virtue of 6801(d);

Position:
Yes;

Reasons:
All requirements in 6801(d) are met.

1997 Ruling 9719203 - STRUCTURED SETTLEMENTS

Unedited CRA Tags
56(1)(d)

Principal Issues:

Ministerial Correspondence

31 August 2000 Ministerial Correspondence 2000-0037464 - EMP.OY. INCOME OF AN INDIAN

Unedited CRA Tags
81(1)(a)

Principal Issues: Taxation of Employment Income earned by an Indian

Position: Question of Fact. Exempt if more closely connected to a location on a reserve, as determined by established guidelines

Reasons: Determination of whether income is more closely connected with a location on a reserve, using published guidelines

Technical Interpretation - External

25 September 2000 External T.I. 2000-0040445 - FLEX CREDITS WITH REDUCTED VACATION

Unedited CRA Tags
6(1)(a)(i)

Principal Issues: Whether the awarding of additional flex credits as part of a change to an employee's employment contract which includes a reduction in vacation entitlement results in additional employment income in the manner set out in paragraph 9 of IT-529. These changes will be made unilaterally by the employer, and it is the Company's practice to review and revise its employee benefit package and the employee salary levels every year. Further, the changes, which are effective January 1 of the next year, are communicated to the employees before the changes take place.

Position: Likely not.

Reasons: A strong argument may be made that a valid renegotiated employment contract is put in place every year.

22 September 2000 External T.I. 2000-0040505 - EFFECT OF DEATH OF SUBSCRIBER ON RESP

Unedited CRA Tags
146.1

Principal Issues: What happens to an RESP when the subscriber dies?

Position: Can't provide an answer.

Reasons: What happens after death will depend on the terms of the RESP contract and provincial law.

22 September 2000 External T.I. 2000-0032675 - STOCK OPTIONS GRANTED INDEPENDENT CONTRACTORS

Unedited CRA Tags
7 9 49

Principal Issues: Where a stock option which was received by a taxpayer in kind as business income is it the Agency's view that the exercise of such an option will always result in business income to the taxpayer?

Position: Only if the exercise of the option is on income account.

Reasons: It will be a question of fact as to whether the exercise leads to income or capital treatment.

21 September 2000 External T.I. 2000-0040485 - NORTHERN RESIDENTS DEDUCTION

Unedited CRA Tags
110.7(1)(a)

Principal Issues: Can an employer designate or reclassify an existing portion of an employee's wages as a Northern Travel Benefit.

Position: Generally no

Reasons: Generally, there must be a link between the travel incurred and the amount paid by the employer.

20 September 2000 External T.I. 2000-0025895 - STRUCTURED SETTLEMENT-ASSIGN.

Unedited CRA Tags
12.2(1) 20(7)(a)

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues

1. Would it be acceptable to provide for an assignment of an annuity contract under a structured settlement where the owner (general insurance corporation) suffers insolvency.

19 September 2000 External T.I. 2000-0029755 - DISTANCE EDUCATION PROGRAMS

Unedited CRA Tags
118.6(1)

Principal Issues: Can a Canadian College of Arts and Technology issue T2202 certificates to students who take the program by distance learning.

Position: Generally, YES

Reasons: Provided all other requirements of 118.1(6) are met, students only need to be enrolled in the program to be entitled to the education tax credit.

19 September 2000 External T.I. 2000-0038295 - EMPLOYEE BENEFITS - GIFTS

Unedited CRA Tags
6(1)(a)

Principal Issues: Whether the presence of a corporate logo on a non-cash gift to an employee reduces the fair market value of the gift for purposes of computing the taxable benefit to the employee.

Position: Question of fact.

Reasons: The effect of a corporate logo on a non-cash gift will have to be determined after reviewing all of the facts related to a particular situation.

19 September 2000 External T.I. 2000-0024625 - ISSUANCE OF T2200-SCHOOLS

Unedited CRA Tags
8(1)(b.1) 8(10)

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues
Whether school administrative officers can be issued form T2200

Position

Not enough facts. Provided general comments only.

14 September 2000 External T.I. 2000-0014955 - Liability of Legal Representative

Unedited CRA Tags
159(3)

Principal Issues:
liability of legal representative under 159(3) in light of Debou case

Position:
primary taxpayer's liability must be estatblished first within parameters of section 152

Reasons:
comments in Debou somewhat misleading wrt phrase "at any time" ; liability must be established within parameters of 152(4) first

14 September 2000 External T.I. 2000-0030125 - DAY TRADER-SMALL BUSINESS DEDUCTION

Unedited CRA Tags
125(7)
Summary Under
Tax Topics - Income Tax Act - Section 125 - Subsection 125(7) - Active Business Carried On by a Corporation

Principal Issues:
Does a day trader who incorporates his business qualify for the small business deduction?

14 September 2000 External T.I. 2000-0006845 - SR&ED Investment Tax Credits

Unedited CRA Tags
127(13) 127(14) 127(5)

Principal Issues:
Whether a transfer of SR&ED expenditure under subsection 127(13) requires that the ownership of the results of the SR&ED be transferred to the transferee.

Position:
The determination of ownership of property arising from SR&ED is a question of fact to be determined on the particular terms of specific agreement between the parties regarding such rights. The agreement described in subsection 127(13) does not attribute any such ownership rights to property arising from SR&ED to any particular taxpayer

Reasons:
Ownership rights to property would normally be determined in accordance with the terms of an agreement and the agreement under which the transfer of SR&ED expenditure is made pursuant to subsections 127(13), (14) and (15) does not provide the terms to that effect.

14 September 2000 External T.I. 2000-0037085 F - ALLOCATION DE RETRAITE

Unedited CRA Tags
6(1)f) 60(j.1)

Principales Questions:
Est-ce que des prestations d'assurance salaire versées par un assureur à un employeur, peuvent être versées à un employé, sous forme d'allocation de retraite et transférées à un REER selon 60j.1) ?

Position Adoptée:
Non

14 September 2000 External T.I. 2000-0023515 F - TAXE DE VENTE AVANTAGE IMPOSABLE

Unedited CRA Tags
6(1)(a)

Principales Questions :

(1)est-ce que le paiement de la taxe de vente sur les primes d'assurance dans un régime d'assurance contre la maladie ou les accidents entièrement financé par les employés confère un avantage imposable à ces employés en vertu de 6(1)a)?
(2) est-ce que ce paiement constitue une contribution de l'employeur au sens de 6(1)f)?

Position Adoptée :
(1) oui.
(2) non.

13 September 2000 External T.I. 2000-0036825 - REPURCHASE OF DEBENTURES ON OPEN MARKET

Unedited CRA Tags
18(9.1) 39(3)
Summary Under
Tax Topics - Income Tax Act - Section 18 - Subsection 18(9.1)

Principal Issues:
Whether paragraph 18(9.1)(d) of the Act would apply when a bond is purchased in the open market by the issuing company in the manner in which open market purchases are normally made by the general public at a price which exceeds the greater of the principal amount of the obligation and the amount for which it was issued by the taxpayer (the "Excess").

Technical Interpretation - Internal

19 September 2000 Internal T.I. 2000-0022277 - NON-RESIDENT RCA WITHHOLDING TAXES

Unedited CRA Tags
212(13)(c)

Principal Issues: Will paragraph 212(13)(c) apply to an RCA when non-resident distributes amounts to a non-resident beneficiary?

Position: Yes.

Reasons: Non-resident payer is deemed to be resident in Canada and is required to withhold on its payments.

15 September 2000 Internal T.I. 2000-0039367 - FISHING LICENCE BUY-BACKS

Unedited CRA Tags
14 39

Principal Issues:
Is the amount received in 1999 under the Atlantic Ground Fish License Retirement subject to income tax?

Position:
File referred to the St. John's Tax Centre.

Reasons:
Seems to be a request for information on a completed transaction or a request for an adjustment.

September 15, 2000

13 September 2000 Internal T.I. 2000-0039987 - NATURE OF LIVING ALLOWANCES

Unedited CRA Tags
56(1)(a) 6(3)

Principal Issues: An entity, which is the central body for XXXXXXXXXX Roman Catholic parishes employs more than XXXXXXXXXX priests to minister to the parishioners of the parishes. When the priests retire, they may (i) begin to reside at parish rectories where they are provided with housing, food and common utilities; (ii) may live at an alternate residence or (iii) reside in a retirement home where care can be provided. With respect to each priest, the entity pays $XXXXXXXXXX per month (the "Amounts") to the rectory ((i) above), directly to the priest ((ii) above), or to the retirement home ((iii) above). Are the Amounts taxable as pension benefits under paragraph 56(1)(a)(i) of the Act or are they non-taxable on the basis that they are living allowances.

Position: The amounts are taxable as pension benefits.

Reasons: They are considered to fall within the general definition of a pension. The position is also considered to be consistent with paragraph 3 of IT-247, paragraph 2 of IT-196R2 and the definition of "superannuation or pension benefit" in subsection 248(1) of the Act.

30 August 2000 Internal T.I. 2000-0036857 - CLASS 14; LICENCE; APPORTION

Unedited CRA Tags
REGS 1100(1)(c)(i)

Principal Issues: meaning of "apportioning" in 1100(1)(c)(i)

Position: need not be on an equal, per diem basis

Reasons: definitions of "apportioning" and "répartissnt"

21 August 2000 Internal T.I. 1999-0009157 - Pay Equity - Estates

Unedited CRA Tags
70(1) 70(2) 3 5(1)

Principal Issues: Where employees or former employees of the federal government died prior to obtaining a determinable right to pay equity wage adjustment as determined by the Canadian Human Rights Tribunal in 1999:
1. Whether pay equity wage adjustments will be taxable in the hands of former employees or their estates?
2. On what date did the employees obtain a determinable right?
3. Whether interest payable in respect of pay equity wage adjustments will be taxable in the hands of former employees or their estates?

Position:
1. No.
2. November 16, 1999.
3. Yes - in the estates.

Reasons:
1. Neither subsection 70(1) nor (2) applies to the employees.
The wage adjustments are not a source of income to the estates.
This is consistent with the Deceased Persons guide.
2. That was the date on which CHRT issued its Consent Order.
3. Interest is subject to tax by virtue of paragraph 12(1)(c).