15 June 1984 Income Tax Severed Letter A-0030 - [840615]

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.

XXXX

D.S. Delorey

June 15, 1984

Dear Sirs:

This is in reply to your letter of May 28 and further to our letter of March 14 concerning the XXXX.

Where employer contributions which relate to services rendered in Canada are made to an employees' benefit plan, any growth on those contributions within the plan are considered to relate to those same services. Since such growth represents employment income to an employee and since employment income is considered to be sourced where the related services were performed, such growth is considered to be Canadian sourced.

With respect to the application of section 94 of the Income Tax Act (the "Act") to the plan trust, the provisions of paragraph 94(1)(c) of the Act would not apply if the discretionary power thereunder of any person relates only to the timing of the payments, rather than to the determination of the amount of income or capital that is to be distributed to a beneficiary, or to the change in the amount of income or capital that would otherwise be distributed to a beneficiary. Thus, if no person has the power to determine the amount of income or capital that is to be distributed to a beneficiary of the plan trust, or to change the amount of income or capital that would otherwise be distributed to such a beneficiary, the plan trust will not be taxable under section 94 of the Act. Also, since it is improbable that the value of a Canadian resident beneficiary's interest in the plan trust would be 10% or more, the likelihood of a beneficiary under the plan trust being affected by the provisions of paragraph 94(1)(d) of the Act is remote.

Yours truly,

for Director Non-Corporate Ruling Division

6(1)(g) 115(1)(a)(i) 94(1)