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: An entity, which is the central body for XXXXXXXXXX Roman Catholic parishes employs more than XXXXXXXXXX priests to minister to the parishioners of the parishes. When the priests retire, they may (i) begin to reside at parish rectories where they are provided with housing, food and common utilities; (ii) may live at an alternate residence or (iii) reside in a retirement home where care can be provided. With respect to each priest, the entity pays $XXXXXXXXXX per month (the "Amounts") to the rectory ((i) above), directly to the priest ((ii) above), or to the retirement home ((iii) above). Are the Amounts taxable as pension benefits under paragraph 56(1)(a)(i) of the Act or are they non-taxable on the basis that they are living allowances.
Position: The amounts are taxable as pension benefits.
Reasons: They are considered to fall within the general definition of a pension. The position is also considered to be consistent with paragraph 3 of IT-247, paragraph 2 of IT-196R2 and the definition of "superannuation or pension benefit" in subsection 248(1) of the Act.
September 13, 2000
XXXXXXXXXX Tax Services Office HEADQUARTERS
XXXXXXXXXX M. Eisner
Audit Services, V & E (613) 957-2138
2000-3998
Living Allowances for Retired Clergy
This is in reply to your memorandums of July 26, 2000 and August 22, 2000 in which you requested our comments on an enclosed letters dated May 10 and June, 27, 2000 from the Archdiocese of XXXXXXXXXX (the "Archdiocese") concerning the above-noted subject.
The Archdiocese is the central body for XXXXXXXXXX Roman Catholic parishes in XXXXXXXXXX. The Archdiocese employs more than XXXXXXXXXX priests to minister to its parishioners.
When priests retire, they normally begin to reside at parish rectories where they are provided with housing, food and common utilities. On behalf of the priests, the Archdiocese pays $XXXXXXXXXX (the "Amount") to the parish with respect to those costs. If a priest owns and lives at an alternate residence, the Amount is paid directly to the priest, or if the priest is infirm, the Amount is paid for the priest's personal care. The personal care is normally provided by the XXXXXXXXXX.
In connection with the Amount paid to a retired priest, you have indicated to us that there is no documentation which requires the Amount to be paid. Rather, the Amount is paid on the basis of a verbal understanding between the Archdiocese and the parishes, retirement homes, and retired priests.
You have asked for our comments on whether the amount is non-taxable on the basis that they are living allowances or whether they should continue to be treated as being pension payments which are taxable under subparagraph 56(1)(a)(i) of the Income Tax Act (the "Act").
Our Comments
On the basis of the information provided to us, it is our view that the Amount is a superannuation or pension benefit that is taxable under subparagraph 56(1)(a)(i) of the Act.
If you require further assistance, we would be pleased to provide our views.
For your information, a copy of this memorandum will be severed using the Access to Information Act criteria and placed in the legislation Access Database (LAD) on the Agency's mainframe computer. A severed copy will also be distributed to the commercial tax publishers for inclusion in their databases. The severing process will remove all material that is not subject to disclosure including information that could disclose the identity of the taxpayer. Should your client request a copy of this memorandum, they can be provided with the LAD version or they may request a copy severed using the Privacy Act criteria which does not remove client identity. Requests for this latter version should be made by you to Jackie Page at (613) 957-0682. The severed copy will be sent to you for delivery to the client.
John Oulton
Manager
Business, Property & Employment Section III
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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