Income Tax Severed Letters - 1999-09-03

Principales Questions: Est-ce que le nombre d'années pour les fins du calcul du transfert de l'allocation de retraite comprend les années pendant lesquelles une personne était en période de congé parentale?

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.

QUESTIONS PRINCIPALES

Principal Issues: Whether property income of a foreign affiliate was directly related to active business activities of another non-resident corporation to which the taxpayer and the foreign affiliate were related

Position: Question of fact. This determination generally requires full knowledge of all the facts and circumstances of an actual case.

Reasons:

Principal Issues:

The tax treatment of amounts paid under the Supplementary Accident Benefits Schedule in Ontario. The particular amounts are paid to a mother and other family members in respect of attendant care provided to two children in the family, who sustained “catastrophic” injuries in an automobile accident.

Position:

The benefit received by the children for attendant care be non-taxable special damages. However, the payments themselves, which are received by the mother and other family members, would be taxable.

Reasons:

Principal Issues: (1) What is the amount of employee benefit for a paid-up premium for a retired employee which is paid over three year, beginning on the employee's retirement. (2) What happens if the employee dies and the unpaid premium becomes fully due?

Position: (1) Presuming that the employer bears the full cost and the insurance policy is a group-term life insurance policy, the amount of the benefit is equal to the sum of each lump-sum premium paid in the year on the life of the taxpayer. (2) Where a taxpayer dies in a calendar year, the taxpayer's prepaid insurance benefit for the year is that portion on any lump-sum premiums paid after Feb. 1994 that have not been included in the taxpayer's prepaid insurance benefit for previous years.

Reasons: Based on subsection 6(4) of the Act and section 2703 of the Regulations.

Principal Issues:

Will a foreign actor's backend participation in net profits from a Canadian production result in the application of 125.4(4) to disallow the producer's claim for the Canadian film or video production tax credit?

PositionS:

Not in an arrangement where the backend participation is given strictly for commercial reasons (e.g., reasonable additional potential remuneration to compensate for a lower than normal salary received by the lead actor). This involves a question fact, based on documents and agreements.

Reasons: