Income Tax Severed Letters - 1996-02-23

Principal Issues:

Are acquisition of new leasing properties of different type still exempt pursuant to Reg 1100(16) ?

Position:

yes, provided no new business

Reasons:

Principal Issues:

Can admin fees charged by the trustee of an RRSP trust put the trust in an overdraft position?

Position:

If terms of plan allow for trustee to collect from the rrsp trust then yes.

Reasons:

Principal Issues:

Would an employee savings plan implemented by a non-profit organization be considered an SDA?

Position:

Question of Fact

Reasons:

Principales Questions:

Dans quelle catégorie doit être inclus un réservoir souterrain pour emmagasiner l'essence?

Position Adoptée:

Principal Issues:

Whether a dual Canadian/U.S. citizen who is hired locally in the U.S. to work for the Canadian Embassy in Washington is covered under the Canada Pension Plan ("CPP") or the U.S. Social Security legislation.

Position:

T/P is covered under U.S. Social Security legislation

Reasons:

Principal Issues:

Whether a letter from a representative of the Ministry of the Attorney General is sufficient to establish that an organization is an agent of the Crown.

Position:

It is not sufficient.

Reasons:

Principal Issues:

nominal lease costs

Position:

not prudent in most situations where a lessee is paying only nominal lease costs to advise clients to calc automobile benefits "as usual"

Reasons:

Principal Issues:

Principal Issues:

can a disability plan to which the employer has contributed be converted to an employee pay all plan as originally intended -issue of retroactive changes and what constitutes a new plan as opposed to a continuation of an existing plan (where the liability for premiums has been shifted from employer to employees)

Position:

-cannot retroactively change the plan & it is a question of fact as to whether a plan amendment creates a new plan
-the existing plan will be a plan which is subject to 6(1)(f) even if the plan documentation indicates otherwise because the employer did make contributions to it even if that was not the intent

Reasons:

Principal Issues:

Whether a corporation and a partnership deal at arm's length, for purposes of paragraph 66(12.66)(d) of the Act, when the general partner is a wholly-owned subsidiary of the corporation.

Position:

Not if CEE will be renounced to the general partner.

Reasons:

Principal Issues:

whether in a "cost plus" plan for PHSP the administrator may be an association to which the employer belongs

Position:

yes-not necessary that administrator be only a trusteed plan or insurance co.

Reasons:

Principal Issues:

tax implications of parent or grandparent lending money to a child or grandchild at no interest for the purchase of either a home or income producing securities

Position:

referred to IT-510 and 511. Ordinarily when a parent loans funds on an interest-free basis to an adult child for the purpose of assisting the child in buying a home to be used as a principal residence, without any income to be derived therefrom, is not subject to 56(4.1).

Reasons:

Principal Issues:
Whether an organization which promotes and regulates sound labour relations, negotiates collective agreements and pursues other similar activities on behalf of its employer-members qualifies as a labour organization.

Position:
It does not.

Reasons:
The expression "labour organization" refers to organizations that carry on labour related activities for the benefit of workers.

Principal Issues:

Whether a company that offers consulting and bookkeeping services, as well as the preparation of financial statements and tax returns is subject to the provisions of new paragraph 249.1(1)(b) of the proposed legislation in respect of fiscal periods contained in the Notice of Ways and Means Motion dated November 27, 1995, which was tabled in the House of Commons on December 12, 1995.

Position

Depends of the facts of each particular situation.

Paragraph 249.1(1)(b) will apply to a professional corporation that would, if the fiscal period ended at the end of the calender year in which it began, be in the period a member of a partnership. The term "professional corporation" will be defined in subsection 248(1) to mean a corporation that carries on the professional practice of an accountant, dentist, lawyer, medical doctor, veterinarian or chiropractor.

Reasons:

Principal Issues:

taxation of free travel thru frequent flyer program

Position:

taxable to the extent points acquired thru employer paid travel

Reasons:

Principal Issues:

Principal Issues:
whether receipts issued by XXXXXXXXXX provided to learning disabled/other children may qualify for purposes of 118.2(2)(e)

Position:
question of fact, individual determination required. Insufficient info provided to even opine whether institute may be considered to provide equipment, facilities or personnel "specially" for the care or care and training of individuals suffering a particular handicap

Reasons:

Principales Questions:
i)Est-ce que des montants payés à un centre de conditionnement physique pour permettre aux employés en général d'avoir accès à des équipements constitue un avantage pour un employé donné?
ii)Est-ce qu'un montant versé par un employeur à un centre de massothérapie et de thalassothérapie, constitue un avantage exclu en vertu de la division 6(1)a)(iv)(A) de la Loi?

Principales Questions:

Est-ce que les revenus tirés des services rendus à l'étranger par une société constitue un revenu «tiré d'une entreprise exploitée au Canada» aux fins de l'article 125 de la Loi?

Position Adoptée:

Principal Issues:

Paragraph 118.2(2)(a)

1.whether a payment made to an electrologist for electrolysis services rendered in a province is a qualifying medical expense
2.whether a payment made to a dental hygienist (who satisfies the medical practitioner requirement) for electrolysis services is a qualifying medical expense
3.whether a payment made to a nurse (who satisfies the medical practitioner requirement) for electrolysis services is a qualifying medical expense
4.whether a payment in respect of electrolysis made to a physician is a qualifying medical expense where the service is performed by an employee (an electrologist) of the physician

Position:

1.no
2.no
3.it might not
4.Yes - provided all the necessary requirements are satisfied

Reasons:

Principal Issues:

Transfer of property to a protective trust. Is paragraph (e) of section 54 applicable?

Position:

Yes.

Reasons:

Principal Issues:

Whether remuneration paid to non-resident persons who are Locally-Engaged Staff of the Canadian Embassy in Saudi Arabia is subject to tax in Canada under subsection 115(2) of the Act.

Position:

Yes.

Reasons: