Income Tax Severed Letters - 2011-04-08

Principal Issues: Whether payments made to a taxpayer in respect to inventions and designs created while the taxpayer was employed by an employer would be considered income from employment, or whether they would be considered income from a business, when the payments continue after the employment has ceased.

Position: In our view, where rights to an invention or a design vest with the employer, and where a taxpayer continues to receive payments for that invention or design after employment ceases, section 6(3) would apply.

Reasons: Previous interpretations given.

Principal Issues: Can a lump sum amount paid for retroactive spousal support in respect of periods prior to the date of a written agreement qualify as a "support amount" in subsection 56.1(4) of the Income Tax Act (the "Act")?

Position: No.

Reasons: A lump sum payment for retroactive spousal support is not for amounts that were payable on a periodic basis that were due after the date of a written agreement that had fallen into arrears and therefore the amount paid does not meet the definition of support amount in subsection 56.1(4) of the Act.

Principal Issues: What are the maximum amounts of qualifying expenditures that two individuals can claim for the HRTC when the individuals marry in the eligible period?

Position: Depends on the facts.

Reasons: The definitions of qualifying renovation and qualifying expenditure are relevant to the determination, as is subsection 118.04(5) of the Act regarding the apportionment of credit.