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.
Principal Issues: Whether an estate has to obtain a business number
Position: Yes.
Reasons: s.6(1)(c) and s.248(1)
XXXXXXXXXX 2007-025050
Lindsay Frank
May 27, 2008
Dear XXXXXXXXXX :
Re: XXXXXXXXXX
This is in reply to your letter concerning the above-referenced matter, in which you seek answers as to why it was necessary for the estate to have a business number. We apologise for the delay in replying.
As indicated in your correspondence, the executrix of the above-referenced estate was entitled to receive compensation for services rendered as an executrix. Subsection 248(1) of the Income Tax Act ("the Act") considers the activities of an executrix to be carried out in the course of, or in relation to, the position of an office. That being the case, it was necessary for the estate to obtain a business number.
Since the activities of an executrix are regarded in that light, paragraph 6(1)(c) of the Act will apply, to include the executrix's compensation from the estate in computing that person's income. Accordingly, the estate will be required to withhold tax, and prepare and issue a T4 slip relating to that withholding. Given that the executrix is over 70 years old, deductions on account of the Canada Pension Plan are not required.
Trusting you find this explanation satisfactory,
Yours truly,
Bob Skulski
Manager
Insolvency and Administrative Law Section
Business and Partnerships Division
Income Tax Rulings Directorate
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 2008
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 2008
Email this Content