Abenaim – Tax Court of Canada finds that an amount received by a terminated employee (claiming oppression) exceeding 18 months’ salary was non-taxable

A senior employee who, in the somewhat distant past, had also been a shareholder, received damages following his termination, and pursuant to a court-mediated settlement agreement, that were well in excess of the going rate for compensation in lieu of notice of 18 months, and received a T4 treating the full amount as a taxable retiring allowance. D’Auray J treated the portion of the damages in excess of 18 months’ salary as a non-taxable receipt given her characterization of his claim against his former employer as being grounded principally in oppression as contemplated in the CBCA and her finding that, indeed, he had been oppressed a lot.

Neal Armstrong. Summary of Abenaim v. The Queen, 2017 CCI 223 under s. 248(1) – retiring allowance.