Income Tax Severed Letters - 2021-01-13

Technical Interpretation - External

28 October 2020 External T.I. 2019-0824091E5 - Members of a credit union of the same class

Unedited CRA Tags
137(6) “bonus interest payment”, “allocation in proportion to borrowing”
Summary Under
Tax Topics - Income Tax Act - Section 137 - Subsection 137(6) - Allocation in Proportion to Borrowing
“class” determined in accordance with credit union’s incorporating statute

Principal Issues: Would payments made to members of one branch of a credit union be considered as made to “members of the credit union of the same class” for purposes of the definitions of “allocation in proportion to borrowing” and “bonus interest payment” in subsection 137(6)?

Position: General comments provided.

Reasons: The allocations in proportion to borrowing or bonus interest payments, as the case may be, must be credited to all taxpayers who were members of the credit union of the same class in the year.

13 October 2020 External T.I. 2020-0860081E5 - Pension income from India

Unedited CRA Tags
56(1)(a), 110(1)(f)(i); Canada-India Income Tax Agreement
Summary Under
Tax Topics - Treaties - Income Tax Conventions - Article 18
a military pension form India was Treaty-exempt

Principal Issues: Tax treatment of a military service pension, a military disability pension, and associated inflation adjustment, from India.

Position: The total amount of these pensions and the associated inflation adjustment received in a tax year is required to be included in income as pension income but is deductible in calculating taxable income in Canada.

Reasons: 56(1)(a), 110(1)(f)(i); Article 18 of the Canada-India Income Tax Agreement.

5 October 2020 External T.I. 2020-0852671E5 - Provident fund - Isle of Man

Unedited CRA Tags
6(1)(g); 56(1)(a)(i); 248(1) "employee benefit plan"
Summary Under
Tax Topics - Income Tax Act - Section 56 - Subsection 56(1) - Paragraph 56(1)(a) - Subparagraph 56(1)(a)(i)
pension fund payments are carved out of EPB benefits where s. 6(1)(g)(iii) applies
Summary Under
Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(g)
foreign pension plans are EBPs

Principal Issues: Whether a provident fund established as an independent trust in the Isle of Man is an employee benefit plan, a pension plan, or both for purposes of the Act.

Position: Question of fact.

Reasons: Insufficient information to provide determinative comments.

Technical Interpretation - Internal

6 November 2020 Internal T.I. 2020-0865661I7 F - SSUC-moment de l'inclusion au revenu/CEWS-inclusion in income

Unedited CRA Tags
125.7(2), 125.7(3), 9(1), 12(1)x)
Summary Under
Tax Topics - Income Tax Act - Section 125.7 - Subsection 125.7(3)
CEWS amounts must generally be included in income under s. 9 or 12(1)(x) by the end of the CEWS periods in question even if not claimed until much later
Summary Under
Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(x)
s. 9 rather than 12(1)(x) could apply to CEWS, which would be included for the related period even if not applied for until much later

Principales Questions: À quel moment un contribuable doit-il inclure la SSUC dans le calcul de son revenu? / When does a taxpayer have to include the CEWS in the calculation of its income?

Position Adoptée: Voir commentaire ci-dessous. / See comments below.

Raisons: Voir commentaire ci-dessous. / See comments below.