Income Tax Severed Letters - 2009-10-16

Ministerial Correspondence

2 October 2009 Ministerial Correspondence 2009-0322861M4 F - DPA - ordinateurs et logiciels connexes

Unedited CRA Tags
CAT 50; CAT 52 20(1)a)

Principales Questions: Le contribuable désire obtenir de l'information concernant un nouveau programme incitatif pour le renouvellement du matériel électronique universel de traitement de l'information et les logiciels de systèmes connexes.

Position Adoptée: Selon les modifications annoncées dans le budget fédéral de 2009, ce matériel et ces logiciels, acquis après le 27 janvier 2009 et avant le 1er février 2011, donnent maintenant droit à un taux de DPA de 100% et doivent être inclus dans la nouvelle catégorie 52 de l'Annexe II du Règlement de l'impôt sur le revenu.

Raisons: Loi de l'impôt sur le revenu et Règlement.

Technical Interpretation - External

1 October 2009 External T.I. 2008-0302001E5 - Employment Income--Situated on a Reserve

Unedited CRA Tags
81(1)(a)

Principal Issues: Will the employment income of members of the particular First Nations in the situation described be exempt from tax?

Position: Question of fact, but may be exempt.

Reasons: Although this is a decision for the local TSO, in our view, Guideline 2 may apply to this situation. This is an employee leasing situation, however, the unusual, specific facts surrounding this employment support the location of the employer as a significant connecting factor.

30 September 2009 External T.I. 2009-0317641E5 F - Attribution de revenu

Unedited CRA Tags
75(2) 104(6)

Principales Questions: 1.Les dispositions du paragraphe 75(2) de la Loi s'appliquent-elles dans le cadre d'une situation hypothétique impliquant l'émission d'actions à Fiducie par Opco et Nouco et l'attribution d'un dividende à Nouco?
2. Fiducie peut-elle déduire le dividende attribué à Nouco selon le paragraphe 104(6) de la Loi?

Position Adoptée: 1. Non 2. Oui

Raisons: Application de la Loi.

29 September 2009 External T.I. 2008-0286071E5 - Non-registered annuity

Unedited CRA Tags
6(1)(a)(ii), 12.2, 56(1)(a)(i), 56(1)(d), 56(1)(x), 207.6(2), 248(1); Reg. 300, 304, 306

Principal Issues: What are the tax consequences to the employee when the employer purchases a non-registered annuity in the year of the employee's retirement to top-up the employee's pension?

Position: Only general comments provided.

Reasons: The tax consequences will depend on the nature of the arrangement. Generally, where an employer arranges the funding of the top-up by purchasing an annuity contract in the name of the employee and provided that the purchase of the annuity represents the payment of a pension benefit, the fair market value of the annuity would be included in the employee's income under subparagraph 56(1)(a)(i). Depending on the terms and conditions of the annuity contract, the annuity payments received by the employee are to be included in the employee's income either under section 12.2 or paragraph 56(1)(d). Where the employer acquires an interest in the annuity contract, the arrangement will likely be an RCA. The employee is to include payments out of the RCA in income in the year received pursuant to paragraph 56(1)(x) and the lump sum used by the employer to acquire the interest in the annuity contract would not be taxed in the hands of the employee.

29 September 2009 External T.I. 2008-0288441E5 - Foreign Investments

Unedited CRA Tags
2, 3, 12.2, 56, 60, 94.1, 94.2, 94.3, 94.4, 126, 138.1, 148 233.3

Principal Issues: What are the foreign reporting requirements and tax implications for a Canadian resident holding certain foreign investments?

Position: Provided general comments.

Reasons: Since the terms and conditions associated with the particular foreign investments are unknown, we are not able to provide definitive comments. General comments provided on the foreign property reporting requirements in section 233.3 of the Act.

XXXXXXXXXX 2008-028844
S. Bernards
September 29, 2009

Technical Interpretation - Internal

2 October 2009 Internal T.I. 2009-0319471I7 - Loss Carry Back and Charitable Donation Credit

Unedited CRA Tags
s. 111 ITA s. 118.1 ITA s. 161(7)(a)(iv)

Principal Issues: Whether interest should be cancelled on a reassessment where a loss was carried back from a subsequent year and a charitable donation was carried forward from a prior year.

Position: No.

Reasons: If the loss was carried back to a taxation year in which tax was payable, subparagraph 161(7)(a)(iv) of the Income Tax Act applies.