Income Tax Severed Letters - 2022-03-23

Ministerial Correspondence

25 November 2019 Ministerial Correspondence 2019-0827841M4 - Mileage rates

Unedited CRA Tags
6(1)(b), Regulation 7305.1, Regulation 7306.

Principal Issues: What per-kilometre rates are generally considered a reasonable motor vehicle allowance.

Position: The prescribed rates are generally considered reasonable.

Reasons: Income tax regulation 7306.

Technical Interpretation - External

15 November 2021 External T.I. 2020-0869971E5 - Indian Act exemption and employees of XXXXXXXXXX

Unedited CRA Tags
81(1)(a), 87(1)(a) of the Indian Act

Principal Issues: Is the employment income exempt under Guideline 4 or a connecting factors test?

Position: No.

Reasons: Guideline 4 does not apply as the Employer is not dedicated exclusively to the social, cultural, educational, or economic development of Indians who for the most part live on-reserve. In addition, there are not enough additional significant factors that connect the income to a reserve.

Technical Interpretation - Internal

15 June 2021 Internal T.I. 2020-0867081I7 - Pension Benefit Received by Estate

Unedited CRA Tags
Paragraph 56(1)(a) and subsections 104(6), 104(13) and 104(24) of the ITA.
Summary Under
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Graduated Rate Estate
no CRA authority to extend 36-month period
Summary Under
Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(24)
up to the trustee to determine whether an amount received on the last day of the year was payable to the beneficiary on that date
Summary Under
Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(27)
s. 104(27) unavailable after estate ceased to be a GRE

Principal Issues: A lump sum amount is paid by a pension plan to the estate of a deceased pensioner after the graduated rate estate status (GRE) has expired. Can the CRA use its discretion to extend the GRE status of the estate?

Position: No. Pursuant to subparagraph 56(1)(a)(i) the lump sum will be included in the income of the estate in the taxation year in which it was received. Where the estate pays or the pension benefit is payable to the beneficiary in the same taxation year of the estate, the estate may claim a deduction under subsection 104(6) and the beneficiary is required to include the amount in their income pursuant to subsection 104(13).

Reasons: Wording of the Act.