Income Tax Severed Letters - 2017-05-17

Technical Interpretation - External

31 March 2017 External T.I. 2016-0630351E5 - Return of a gift

Unedited CRA Tags
118.1, 149.1, 168 and 188.1
return of gift made 35 years ago
gift potentially could be returned by charity pursuant to a condition subsequent
return of gift made 35 years previously by charity

Principal Issues: 1) Can a registered charity return a gift of a life insurance policy to a donor? 2) If so, what are the tax consequences to the registered charity and to the donor?

Position: General comments provided.

Reasons: 1) Question of law. 2) Legislation.

1 March 2017 External T.I. 2015-0617871E5 - Indian Employment Income

Unedited CRA Tags

Principal Issues: Will the employment income of the Indian employees qualify for an exemption from tax under the Guidelines?

Position: Question of fact.

Reasons: Facts provided.

17 February 2017 External T.I. 2016-0669931E5 F - Laissez-passer de compagnies de transport aérien

Unedited CRA Tags

Principal Issues: La question est de savoir si les politiques administratives de l’Agence du revenu du Canada relativement aux laissez-passer de transport suivants sont encore en vigueur: i) les laissez-passer de transport de type « mise en attente » (appelés en anglais, standby passes) fournis aux employés de compagnies de transport aérien; et ii) les laissez-passer de transport de type « mise en attente » et les laissez-passer de transport donnant droit de retenir et confirmer une place (appelés en anglais, space-confirmed passes) fournis aux employés retraités de compagnies de transport aérien.

Position: Voir la réponse ci-bas.

Reasons: Voir ci-bas.

17 February 2017 External T.I. 2016-0662341E5 - Airline passes – retired and current employees

Unedited CRA Tags
ITA: 6(1)(a)
use of space-confirmed, but not standby, passes by airline employees is taxable

Principal Issues: Whether the CRA’s administrative policies concerning standby airline passes provided to current airline employees and standby and space-confirmed airline passes provided to retired airline employees are still valid?

Position: See response.

Reasons: See response.

Technical Interpretation - Internal

12 January 2017 Internal T.I. 2016-0636911I7 - Standby Charge - PST and the cost of an automobile

Unedited CRA Tags
6(1)(e.1); 6(2); 6(2.1); 6(7); 54; 7307(1)(b) ITR
car standby charge is reduced for the sales tax reduction occurring where a trade-in allowance is provided on the car purchase
cost for standby charge purposes reduced by sales tax reduction attributable to trade-in

Principal Issues: Does the cost of an automobile for the purposes of subsection 6(2) of the Income Tax Act include the actual PST paid or the PST that would have been payable if there was no trade-in?

Position: It depends on the relevant PST legislation, but in most provinces, the cost should likely only include the actual PST paid.

Reasons: See below.