Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
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 payments for damages received from employer as a result of a discharge grievance is a retiring allowance.
Position:
It is a retiring allowance.
Reasons:
The definition of retiring allowance if very broad and includes most damages per previous correspondence.
963964
XXXXXXXXXX Jacques E. Grisé
(613) 957-2059
Attention: XXXXXXXXXX
February 10, 1997
Dear Sirs:
Re: Awarded Damages
This is in reply to your letters of November 21, 1996 and December 5, 1996 concerning damages awarded to XXXXXXXXXX.
XXXXXXXXXX was discharged from his employment by XXXXXXXXXX. A discharge grievance made by XXXXXXXXXX was the subject of a hearing before an Arbitration Board. The Board awarded damages to XXXXXXXXXX for what it described as " XXXXXXXXXX ". Payment of the award is being held back by the Employer pending the determination of the correct income tax classification of the award.
We are of the opinion that the award is a retiring allowance that will be required to be included in computing XXXXXXXXXX income pursuant to subparagraph 56(1)(a)(ii) of the Income Tax Act (the Act). The award falls within the definition of "retiring allowance" in subsection 248(1) of the Act which includes an amount "in respect of a loss of an office or employment of a taxpayer, whether or not received as, on account or in lieu of payment of, damages".
Yours truly,
John F. Oulton
for Director
Business and Publications Division
Income Tax Rulings and Interpretations Directorate
Policy and Legislation Branch
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