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: whether damages are retiring allowance
Position: question of fact and law, but probably yes
Reasons: 248(1) definition of retiring allowance
XXXXXXXXXX Denise Dalphy, LL.B.
November 23, 2001
We are writing in reply to your letter dated August 11, 2001 wherein you enquired whether it would assist us if you were to provide us with certain documentation relating to your client's (XXXXXXXXXX) income tax assessment for his 1999 taxation year.
As we stated in our letter dated June 27, 2001, written confirmation of the income tax consequences of a particular transaction or event are only given by this Directorate (in Headquarters) when the transactions are both proposed (that is they are to take place in the future, and have not already occurred) and the transactions are the subject of an advance income tax ruling request. Although we did provide your client with general, non-binding comments, we also advised him that a review of all of the facts as well as the relevant documentation would have to be conducted by the relevant Tax Services Office (not Headquarters), where they have expertise at investigations and in making such factual determinations, before they could render an opinion with some certainty. As a result, we cannot provide any guidance other than that which we offered in our aforementioned letter.
As we essentially stated in our aforementioned letter, our initial reaction was that your client's claim for damages for mental distress is related to his claim of constructive wrongful dismissal. This position is supported, inter alia, by the text of the Release that your client signed, wherein he agreed to release the Defendant from all claims, including those related to "the conditions of [his] employment and the constructive dismissal thereof" [emphasis added].
However, notwithstanding the foregoing, if you would like, you may wish to submit any relevant documents to XXXXXXXXXX local Taxation Services Office for their consideration. If, in fact, the Tax Services Office, after they have reviewed all relevant materials and information, concludes that the amounts that XXXXXXXXXX received were in respect of his loss (actual or constructive) of employment, the amounts will in all likelihood constitute a "retiring allowance" as that term is defined in the Income Tax Act.
The foregoing comments represent our general views with respect to the subject matter. As indicated in paragraph 22 of Information Circular 70-6R4, the above comments do not constitute an income tax ruling and accordingly are not binding on the Canada Customs and Revenue Agency. Our practice is to make this specific disclaimer in all instances in which we provide an opinion.
Business and Partnerships Division
Income Tax Rulings Directorate
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