15 January 2002 External T.I. 2001-0107565 - AWARD-UNIVERSITY

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 CCRA.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.

Principal Issues

Is the recipient of the XXXXXXXXXX taxable?

POSTION
Yes under 6(1)(a) of the Act

Reasons

Award is given on basis of achievements while employed with the university.

XXXXXXXXXX 2001-010756
C. Tremblay, CMA
January 15, 2002

Dear XXXXXXXXXX:

Re: XXXXXXXXXX

This is in reply to your letter dated October 25, 2001, wherein you enquired whether the above-referenced award is a taxable benefit or a tax-free windfall to the recipient.

You inform us that the XXXXXXXXXX Award is presented semi-annually to a faculty member of the University of XXXXXXXXXX who has made a major contribution to knowledge or artistic creativity in their area of expertise while employed at the University of XXXXXXXXXX. A plaque and $XXXXXXXXXX recognize the recipient of this award. Individuals eligible for the award are restricted to employees of the University of XXXXXXXXXX who are faculty members and who have not received the award in the past. At least two colleagues must nominate the candidate. Among the contributions to scholarly and artistic achievement to be considered by the Selection Committee are as follows:

XXXXXXXXXX.

Our Comments

It is our view that the award is sufficiently related to employment at the University of XXXXXXXXXX that it is taxable as income from employment. In this regard we refer you to paragraph 6(1)(a) of the Income Tax Act (the "Act") which states:

"There shall be included in computing the income of a taxpayer for a taxation year as income from an office or employment such of the following amounts as are applicable:

(a) the value of board, lodging and other benefits of any kind whatever received or enjoyed by the taxpayer in the year in respect of, in the course of, or by virtue of an office or employment, except..."

The words " in respect of" were considered in the Supreme Court of Canada decision Nowegijick v. The Queen (83 DTC 5041), where Mr. Justice Dickson commented, "The words "in respect of" are, in my opinion words of the widest possible scope. They import such meanings as "in relation to", "with reference to" or "in connection with". The phrase "in respect of" is probably the widest of any expression intended to convey some connection between two related subject matters."

Whether or not the recipient expects the award or the recipient will only receive the award once are not relevant factors. What is significant, on the other hand, is the fact that the award is restricted to employees of the University.

Accordingly, in our view, the award is paid by an employer in connection with an employee's office or employment and should be included in the employee's income under paragraph 6(1)(a) of the Act.

We trust our comments are of assistance.

Yours truly,

Steve Tevlin
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Policy and Legislation Branch
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