Income Tax Severed Letters - 2020-02-26

Technical Interpretation - External

30 January 2020 External T.I. 2019-0819671E5 - Home Buyers’ Plan and Specified Disabled Person

Unedited CRA Tags
146.01

Principal Issues: Whether a withdrawal from an RRSP meets the condition of subparagraph (b)(ii) of the definition of “supplemental eligible amount” in subsection 146.01(1).

Position: Yes.

Reasons: The purpose of the withdrawal is to enable the disabled person to live in an environment better suited to their personal needs and care.

27 January 2020 External T.I. 2019-0833061E5 - Discretionary Trust and Safe Income

Unedited CRA Tags
55(2.1)(c), 55(5)(f), 104(6), (13) and (19)
Summary Under
Tax Topics - Income Tax Act - Section 55 - Subsection 55(2.1) - Paragraph 55(2.1)(c)
safe income required to be allocated pro rata between individual and corporate beneficiary of discretionary family trust

Principal Issues: If a discretionary trust receives a dividend that is only partially supported by safe income and allocates this dividend to two beneficiaries - one of which is a corporation and one of which is an individual - can the trustees of the discretionary trust exercise their discretion so that only the portion of the dividend received by the corporation will benefit from the safe income associated with the dividend?

Position: In our view the trustees of a discretionary trust would not have the discretion to allocate safe income to different portions of a dividend deemed to have been received by the trust’s beneficiaries pursuant to subsection 104(19). The safe income would be allocated to the different portions of the dividend received by the beneficiaries on a pro rata basis.

Reasons: The designation in subsection 104(19) provides that the beneficiary of a trust is deemed to have received a taxable dividend (or a portion of a taxable dividend) that would have otherwise been received by the trust. It does not provide the trustees of a trust with the discretion to divide the safe income associated with a dividend that would have otherwise been received by the trust amongst the portions of the dividend that are deemed to have been received by the beneficiaries of the trust.

23 January 2020 External T.I. 2019-0796121E5 F - Déduction pour résidence des membres du clergé

Unedited CRA Tags
8(1)c)
Summary Under
Tax Topics - Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(c)
s. 8(1)(c) does not entail any home office requirement

Principales Questions: Un particulier doit-il maintenir un bureau dans sa résidence dans le cadre de ses fonctions de membre du clergé pour avoir droit à la déduction pour résidence des membres du clergé? / Does a taxpayer have to maintain an office in the taxpayer's residence in the course of the taxpayer's employment as a member of the clergy to access the deduction for clergy residence?

Position Adoptée: Non. / No.

Raisons: Libellé de la Loi. / Wording of the Act.

23 January 2020 External T.I. 2019-0830781E5 - Charitable gift annuity and 60(l) rollover

Unedited CRA Tags
60(l)(ii)
Summary Under
Tax Topics - Income Tax Act - Section 60 - Paragraph 60(l) - Subparagraph 60(l)(ii)
an annuity issued by a registered charity did not qualify for the s. 60(l) rollover

Principal Issues: Whether we would reconsider our position that a charitable gift annuity issued by a registered charity is ineligible for a tax-deferred rollover under paragraph 60(l)?

Position: No.

Reasons: A limited exemption under provincial insurance law does not amount to an authorization to carry on an annuities business in Canada.

8 November 2019 External T.I. 2019-0820401E5 - Temporary Residence Allowance

Unedited CRA Tags
6(1)(b)(vii), the definitions "employee" and "office" in subsection 248(1)
Summary Under
Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(b) - Subparagraph 6(1)(b)(vii)
a s. 6(1)(b)(vii) reasonable allowance could include an apartment allowance re legislative sittings away from the constituency office

Principal Issues: Whether an allowance provided to Members of the Provincial legislative assembly of XXXXXXXXXX for maintaining temporary residences in XXXXXXXXXX can be excluded from income pursuant to subparagraph 6(1)(b)(vii) of the Income Tax Act.

Position: A Member of the Provincial Legislative Assembly's constituency office can be considered to be the Member's regular place of employment and a reasonable travel allowance for expenses related to accommodation while attending official business in the Provincial capital will likely be covered by the exception in subparagraph 6(1)(b)(vii) of the Income Tax Act. The reasonableness of an allowance is a question of fact that can only be determined on a case by case basis.

Reasons: See analysis.