Income Tax Severed Letters - 1995-12-01

Ministerial Correspondence

30 October 1995 Ministerial Correspondence 9525384 - EDUCATION CRUISE

Unedited CRA Tags
9

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.

MINISTER/DEPUTY MINISTER'S OFFICE 95-06622M
ADM'S OFFICE
RETURN TO 15TH FLOOR, ALBION TOWER

October 30, 1995

XXXXXXXXXX

Dear XXXXXXXXXX

27 October 1995 Ministerial Correspondence 9525634 - EDUCATIONAL CRUISE

Unedited CRA Tags
9

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.

MINISTER/DEPUTY MINISTER'S OFFICE 95-06925M
ADM'S OFFICE
RETURN TO 15TH FLOOR, ALBION TOWER
October 27, 1995

XXXXXXXXXX

Dear XXXXXXXXXX

Technical Interpretation - External

24 November 1995 External T.I. 9506725 - FOREIGN AFFILIATE - LENDING OF MONEY

Unedited CRA Tags
95(1)

Principal Issues:

WHETHER PURCHASE OF LOAN THAT IS A "PRESCRIBED SECURITY" TO THE SELLER QUALIFIES AS "LENDING OF MONEY" UNDER 95(1).

Position: NO

Reasons:

21 November 1995 External T.I. 9526215 F - CALCUL DES INTÉRETS COURUS - INTÉRETS PAYÉS ANNUELLEMENT

Unedited CRA Tags
REG 7000(2)c.1)

Principales Questions:

De quelle façon applique-t-on le nouvel alinéa 7000(2)c.1) du Règlement lorsque les intérêts sont payés annuellement.

Position Adoptée:

20 November 1995 External T.I. 9521415 - THIN CAPITALIZATION

Unedited CRA Tags
18(4)(a)

Principal Issues:

1. Does the definition of "specified shareholder" in subsection 18(5) of the Act require a person to own shares of the corporation?

2. Are amounts contributed by a specified shareholder included in clause 18(4)(a)(ii)(B) after a person ceases to be a specified shareholder.

Position:

1. yes. 2. no.

Reasons:

17 November 1995 External T.I. 9526625 - FOREIGN PENSION TRANSFER TO RPP

Unedited CRA Tags
147.1(2)

Principal Issues:

Whether tax deferred roll between foreign pension and RPP is possible?

Position:

Yes, if certain conditions are met.

Reasons:

17 November 1995 External T.I. 9527005 - LOSS OF EMPLOYMENT - SETTLEMENT PAYMENT S

Unedited CRA Tags
56(1)(a)(ii) 248(1) 3

Principal Issues:

Whether a payment received by an employee from the employer in settlement of a claim for damages resulting from alleged human rights violations is taxable as employment income, retiring allowance or not taxable at all

Position:

A review of the quantum of awards in the relevant provincial human rights jurisprudence would be required to determine whether any portion of the amount paid under the settlement could be considered non-taxable damages. Otherwise, in the circumstances, the payment would be a retiring allowance. Any reimbursed legal fees related to the portion considered to be a retiring allowance would be required to be included in income under 56(1)(l.1) and deductible to the extent permitted under 60(o.1) of the Act.

Reasons:

17 November 1995 External T.I. 9529525 - MAXIMUM 1994 SASK INCOME OF PENSIONER WITH NO TAX

Unedited CRA Tags
1

Principal Issues:

maximum level of income without attracting tax

Position:

based on a given set of assumptions, for 1994 is 10,938

Reasons:

17 November 1995 External T.I. 9525895 - Damages-Wrongful Dismissal,Mental Distress

Unedited CRA Tags
248(1)

Principal Issues:

whether damages for wrongful dismissal, loss of reputation, aggravated damages, punitive damages and mental distress (lump sum amount of $50,000) are a retiring allowance

Position:

represents a retiring allowance

Reasons:

17 November 1995 External T.I. 9525965 - CONTRIBUTIONS TO A U.S. 401(K) PLAN

Unedited CRA Tags
248(1)(l) 207.6(5.1) 18(1)(o) 18(10)

Principal Issues:

Whether Canadian resident employee and his employer entitled to deduction for contributions to a 401(k) plan.

Position:

Plan considered an EBP; no for employee and yes for employer.

Reasons:

16 November 1995 External T.I. 9528295 - ASSUMPTION REINSURANCE AND POLICY LOANS

Unedited CRA Tags
138(11.92)

Principal Issues:

Whether or not the obligations which are referred to in subsection 138(11.92) are net of policy loans.

Position:

Yes

Reasons:

15 November 1995 External T.I. 9521435 - SECURITIES LENDING ARRANGEMENT

Unedited CRA Tags
260(1) 260(2) 260(5) 9

Principal Issues:

Compensation and lending fees deductible? Short sales and securities lending

Position:

Expenses deductible under section 9 - on income account

Reasons:

15 November 1995 External T.I. 9523635 - MANAGEMENT SERVICES PARTNERSHIP

Unedited CRA Tags
245(2)

Principal Issues:

GAAR and Partnership Services

Position:

Question of fact

Reasons:

15 November 1995 External T.I. 9514595 - FOREIGN AFFILIATE-ALLOCATION PROCEED SHARE TRANSFER

Unedited CRA Tags
95(2)(C)

Principal Issues:

ALLOCATION OF PROCEEDS WHERE THE SHARES OF SEVERAL AFFILIATES ARE TRANSFERRED TO ANOTHER AFFILIATE IN RETURN FOR REDEEMABLE PREFERRED SHARES OF THE AFFILIATE ALL OF WHICH ARE OF THE SAME CLASS.

Position:

PROVIDED THAT THE AGREEMENT STIPULATES THE NUMBER OF REDEEMABLE PREFERRED SHARES THAT WILL BE ISSUED BY THE TRANSFEREE IN RESPECT OF THE SHARES OF EACH CORPORATION IT RECEIVES, THE PROCEEDS TO THE TRANSFEROR WILL BE ALLOCATED TO EACH SUCH ITEM (SUBSIDIARY) TRANSFERRED ACCORDINGLY.

Reasons:

14 November 1995 External T.I. 9521535 - LIMITED LIABILITY CORPORATION-COLORADO

Unedited CRA Tags
126(7) 20(11)

Principal Issues:

Whether foreign taxes paid by a resident of Canada on income received from a limited liability corporation ("LLC") resident in the US which is not a foreign affiliate of the taxpayer qualifies as a "business-income tax" or a "non-business-income tax".

Position:

Subject to the provisions of paragraphs (a), (b) and (c) of the definition of non-business-income tax in subsection 126(7) of the Act, the tax paid in the US will qualify as a non-business-income tax.

Reasons:

14 November 1995 External T.I. 9525885 - LARGE CORPORATION TAX

Unedited CRA Tags
181.2(3)(g)

Principal Issues:

Whether balance sheet amounts on transactions between related parties, as sanctioned by section 3840 of the CICA Handbook, are used for LCT purposes.

Position:

Generally Yes. However, we seem to be missing some facts or an indication of what the taxpayer's specific concerns are, if any. Therefore we have provided very general comments only.

Reasons:

14 November 1995 External T.I. 9521305 - MEDICAL EXPENSES

Unedited CRA Tags
118.2(2)

Principal Issues:

We have been asked to reexamine a previously submitted request regarding the qualification of a monthly service fee as a medical expense in light of additional information provided by the writer.

Position:

Will be eligible pursuant to 118.2(2)(o) of the Act as long as the fee is paid and is directly attributable to the cost of an eligible expense as opposed to availability of the service.

Reasons:

10 November 1995 External T.I. 9523875 - CAPITAL GAIN DISTRIBUTIONS FROM A U.S. CORPORATION

Unedited CRA Tags
90(1) 12(1)(k) 131(8)

Principal Issues:

Whether a capital gains distribution from a U.S. corporation to a Canadian shareholder can be treated as a capital gain as apposed to a dividend.

Position:

No.

Reasons:

9 November 1995 External T.I. 9523495 - RETIREMENT FOLLOWED BY EMPLOYMENT

Unedited CRA Tags
56(1)(a)(ii) 60(j.1)

Principal Issues:

1)Whether providing services as independent contractor, sole proprietor, partner, or employee of other corporation can be construed as continued employment or office so as to disqualify payment as a "retiring allowance";

2)deductibility by employer of non-arm's length payment of retiring allowance.

Position:

1)Question of fact although confirmed that employment or office with person described in 60(j.1)(iv) is not for that reason alone considered to be employment or office with an affiliate;

2)should not exceed what is a reasonable amount in an arm's length situation.

Reasons:

9 November 1995 External T.I. 9518525 - LUMP SUM TRANSFER FROM FOREIGN PLAN TO RPP

Unedited CRA Tags
56(1)(a)(i) 60(j) REG 8300(1) REG 8301(4) 146(16)

Principal Issues:

7 November 1995 External T.I. 9519935 F - RÉDUCTION SALARIALE POUR AMÉLIORATIOND'AVANTAGES SOCIAUX

Unedited CRA Tags
6(1)a)

Principales Questions:

Est-ce qu'une réduction salariale consentie par un employé en contrepartie d'un programme amélioré d'avantages sociaux accordé par son employeur (assurance et pension) fait en sorte que le salaire autrement reçu par l'employé soit converti en avantage non imposable?

Position Adoptée:

6 November 1995 External T.I. 9515345 - PASSIVE INCOME OF A FACTORING FOREIGN AFFILIATE

Unedited CRA Tags
95(2)(a)(iii) 95(2)(a)(i)

Principal Issues:

Whether interest income earned from passive investments by a foreign affiliate with an accounts receivable factoring operation, the income from which is subject to 95(2)(a)(iii), is also deemed to be income from an active business.

Position:

95(2)(a)(iii) only applies to income derived directly from factoring receivables, therefore the passive income would have to qualify under 95(2)(a)(i) in order to be deemed active business income.

Reasons:

1 November 1995 External T.I. 9519575 F - ALLOCATION ACCORDÉ A UN EMPLOYÉ A L'ÉGARD DE REPAS

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

Principales Questions:

Une indemnité de repas versée par une société à ses employés syndiqués:

i) lorsqu'ils font des heures supplémentaires; ou

ii) lorsque leur repas est interrompu dans certains circonstances (tel qu'un bris de machine),

est-elle non imposable?

Position Adoptée:

1 November 1995 External T.I. 9525505 F - VENTE D'UN IMMEUBLE A REVENU AU CONJOINT

Unedited CRA Tags
73(1) 74.1(1) 74.1(1)a) 74.1(1)b) 20(1)c)

Principales Questions:

31 October 1995 External T.I. 9526255 - FOREIGN AFFILIATES - EMPLOYEE EQUIVALENCY TEST

Unedited CRA Tags
95(1)

Principal Issues:

whether part-time employees are included in determining whether the "equivalent of more than 5 employees full time are employed" by a foreign affiliate in a business for the purposes of the investment business definition in s.s. 95(1).

Position:

yes

Reasons:

27 October 1995 External T.I. 9523185 - DEATH BENEFITS

Unedited CRA Tags
248(1)

Principal Issues:

26 October 1995 External T.I. 9522625 - STRUCTURED SETTLEMENTS

Unedited CRA Tags
56(1)(d) 60(a)

Principal Issues:

23 October 1995 External T.I. 9511405 F - SOCIETE ETRANGERE AFFILIEE

Unedited CRA Tags
REG 5907(1)(f) REG 5901(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.

5-951140
XXXXXXXXXX M. Séguin
(613) 957-8953

A l'attention de XXXXXXXXXX

Le 23 octobre 1995,

Monsieur,

23 October 1995 External T.I. 9522955 - MEDICAL EXPENSES

Unedited CRA Tags
118.2(2)(a)

Principal Issues:

23 October 1995 External T.I. 9510975 F - SOCIETE ETRANGERE AFFILIEE

Unedited CRA Tags
95(1) 91(4) REG 5907(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.

5-951097
XXXXXXXXXX M. Séguin
(613) 957-8953

A l'attention de XXXXXXXXXX

Le 23 octobre 1995,

Monsieur,

20 October 1995 External T.I. 9515555 - ALBERTA IRRIGATION DISTRICTS

Unedited CRA Tags
81(3)

Principal Issues:

whether elected board members of irrigation districts incorporated under the Irrigation Act of Alberta qualify under subsection 81(3), i.e. are an "other similar body" as referred to in 81(3)(b)

Position:

After a review of the Municipal Government Act and the Irrigation Act for Alberta, a board member may be considered "an officer of a municiapl utilities board, commission or corporation or any other similar body". If any remuneration is to be exempted under 81(3) in respect of such member, the member must also meet the "elected by popular vote" criteria as discussed in response

Reasons:

12 October 1995 External T.I. 9519585 F - ACTIONS PRESCRITES

Unedited CRA Tags
6205(2)a)(ii)(B)

Principales Questions:

Aux fins de l'application de la définition d'«action prescrite» de la division 6205(2)a)(ii)(B) du Règlement de l'impôt sur le revenu, est-ce qu'un administrateur est un employé d'une société donnée?

Position Adoptée:

11 October 1995 External T.I. 9517005 - QUALIFIED FARM PROPERTY - ATTRIBUTION RULES

Unedited CRA Tags
110.6(1) 74.2(1) 40(2)(c)

Principal Issues:

Conference

12 October 1995 CTF Roundtable Q. 1, 9524620 - CAPACITY IN WHICH A LOAN REC'D & RUNNING ACCOUNTS

Unedited CRA Tags
15(2)

Principal Issues:

capacity under which shareholder loan is received & whether a running acct involves a series of loans and repayments

Position: question of fact

Reasons:

Technical Interpretation - Internal

16 November 1995 Internal T.I. 9524257 - EMPLOYMENT EXPENSES

Unedited CRA Tags
6 8(1)(g)

Principal Issues:

8 November 1995 Internal T.I. 9525077 - NON-COMPETITION PAYMENTS

Unedited CRA Tags
14(1) 42

Principal Issues:

Are non-competition payments received by shareholder of a corporation and a non-shareholder taxable under 14(1) where the business assets of the corporation are sold and the shareholder and non-shareholder do not otherwise carry on a business personally (either before or after the sale).

Position:

No. Capital gains treatment applies.

Reasons:

7 November 1995 Internal T.I. 9527677 - 12(1)(X)

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.

Agri-Land Sales & Leasing
900-1801 Hamilton Street
Regina, Saskatchewan 952767
S4P 4L5 A.M. Brake

Attention: Tim R. Frass, CMA, CA.

November 7, 1995

Dear Sirs:

Re: Western Grain Transition Payments Program ("WGTPP")

23 October 1995 Internal T.I. 9523196 - MEDICAL EXPENSES

Unedited CRA Tags
118.2(2)(a)

Principal Issues:

17 October 1995 Internal T.I. 9517877 - DISPOSITION OF SHARES

Unedited CRA Tags
85(1) 54

Principal Issues:

13 October 1995 Internal T.I. 9517367 F - IT-215 PARAGRAPHE 13 - RESERVE RENVOIS DE MARCHANDISES

Unedited CRA Tags
18(1)(e)

Principales Questions:

Interprétation du paragraphe 13 du Bulletin d'interprétation IT-215R. La signification de l'expression «sale or return» utilisée dans ce paragraphe.

Position Adoptée:

12 October 1995 Internal T.I. 9524630 - BENEFITS FROM RELOCATION INDUCEMENTS

Unedited CRA Tags
6(1)(a)

Principal Issues:

7 questions on taxable benefits arising from the relocation of an employee

Position: taxable

Reasons: cost of living compensation is not a relocation expense

6 October 1995 Internal T.I. 9514396 - WORKERS COMPENSATION AWARD PAYMENTS

Unedited CRA Tags
56(1)(u) 56(1)(v) 110(1)(f)(ii)

Principal Issues:

2 October 1995 Internal T.I. 9991117 - CAN INSURANCE CONTRACTS BE EBPS

Unedited CRA Tags
248(1) 6(1)(a)

Principal Issues:

28 September 1995 Internal T.I. 9509847 - COMPUTER SOFTWARE

Unedited CRA Tags
CLASS 12

Principal Issues:

26 July 1995 Internal T.I. 9519357 F - CRÉDIT POUR IMPÔT ÉTRANGER

Unedited CRA Tags
126(7) 126(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.

		Le 26 juillet 1995
	Bureau de district de Montréal	Bureau principal   
		Section des réorganisations
	Attention: Serge Tremblay	et des entreprises étrangères
(613) 957-8953
		7-951935

Crédit pour impôt étranger

14 July 1995 Internal T.I. 9505397 F - CRÉDIT POUR IMPOT ÉTRANGER

Unedited CRA Tags
126(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.

Le 14 juillet 1995

Ministerial Letter

3 November 1995 Ministerial Letter 9529118 - CANADIAN CULTURAL PROPERTY EXPORT REVIEW BOARD

Unedited CRA Tags
110.1 118,.1 39(1)(a)(i.1) 118.1 (10) 118.1(11)

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.

CANADIAN CULTURAL PROPERTY EXPORT REVIEW BOARD

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