Income Tax Severed Letters - 2024-12-04

Technical Interpretation - External

20 August 2024 External T.I. 2024-1002921E5 - Working off-reserve due to an accommodation-s87 IA

Unedited CRA Tags
81(1)(a) of the Income Tax Act and Section 87 of the Indian Act

Principal Issues: Would the employment income earned by a First Nations employee, who returned to work after a long-term disability and is approved by their employer to work from home off-reserve due to a medical accommodation, qualify for the income tax exemption under the Indian Act?

Position: Not likely.

Reasons: Neither the Indian Act Exemption for Employment Income Guidelines nor the Guidance on the Application of the Indian Act Exemption for Employment Income Guidelines to issues raised by the COVID-19 crisis apply to the employment situation of the employee in 2024. In addition, there do not appear to be any sufficient connecting factors to situate the employment income on a reserve.

9 August 2024 External T.I. 2023-0969381E5 - XXXXXXXXXX – Allowance

Unedited CRA Tags
5(1); 6(1)(a); 6(1)(b); 56(1)(n); ITR 200(1)

Principal Issues: The tax treatment and reporting requirements of allowance payments from the XXXXXXXXXX to recruits.

Position: Depends on whether an employment relationship exists. If an employment relationship exists, the allowance would be considered income from employment under paragraph 6(1)(b) of the Act. If no employment relationship exists, the allowance would be included in the recruit’s income pursuant to paragraph 56(1)(n) of the Act, to the extent the amount exceeds the scholarship exemption. Under subsection 200(2) of the Income Tax Regulations, every payer of a research grant, scholarship, fellowship, bursary or prize (other than a prescribed prize) must report the amount on a T4A Slip, Statement of Pension, Retirement, Annuity and Other Income.

Reasons: If an employment relationship exists, the allowance does not appear to fall within any of the exceptions listed in subparagraphs 6(1)(b)(i) to (ix) of the Act. If an employment relationship does not exist, the allowance appears to be financial assistance paid to enable a student to pursue his or her education.

19 January 2024 External T.I. 2020-0865921E5 F - Foreign Currency dispositions by an individual

Unedited CRA Tags
39(1), 39(1.1)
Summary Under
Tax Topics - Income Tax Act - Section 39 - Subsection 39(1.1)
foreign currency dispositions under s. 39(1.1) include FX bank deposit conversions
Words and Phrases
currency money

Principales Questions: 1) Est-ce que le paragraphe 39(1.1) s’applique aux dispositions d’une monnaie autre que la monnaie canadienne détenue par un particulier en dépôt dans une institution financière? / Whether subsection 39(1.1) applies to currency held on deposit with a financial institution. 2) Est-ce que le paragraphe 39(1.1) s’applique aux dispositions de titres négociables ou de biens immobiliers? / Whether subsection 39(1.1) applies to dispositions of negotiable instruments or real estate.

Position Adoptée: 1) L’expression « disposition d’une monnaie autre que la monnaie canadienne » au paragraphe 39(1.1) comprend les dispositions de fonds en monnaie étrangère détenus par un particulier en dépôt dans compte-chèques ou un compte de dépôt courant dans une institution financière, dans la mesure où le particulier peut retirer la monnaie déposée en tout temps, la convertir en une autre monnaie en tout temps ou l’utiliser en tout temps pour effectuer un achat ou un paiement. / The phrase « dispositions of currency other than Canadian currency » in subsection 39(1.1) includes dispositions of foreign currency held by an individual in a chequing or current deposit account, which entitles the depositor to withdraw the currency on deposit at any time, are converted into another currency or used to make a purchase or a payment. 2) Non, le gain en capital ou la perte en capital attribuable à la fluctuation de la valeur de la monnaie lors de la disposition de titres négociables ou de biens immobiliers, lorsqu’il est établi qu’ils sont des immobilisations, est visé par le paragraphe 39(1). / No, the capital gain or capital loss attributable to the fluctuation in the value of currency on the disposition of marketable securities or real estate, where it is established that it is capital property, is subject to subsection 39(1).

Raisons: 1) Analyse textuelle, contextuelle et téléologique du paragraphe 39(1.1). / Textual, contextual and purposive interpretation of subsection 39(1.1). 2) Application de la loi. / Application of the act.

Technical Interpretation - Internal

30 May 2024 Internal T.I. 2024-1007151I7 - XXXXXXXXXX At Home Caregiver Benefit

Unedited CRA Tags
5, 6, 9, 56(1)(u), 56(2), 118.2(2)(b), 118.2(2)(b.1), 118.2(2)(c), 251(2)(a), ITR 200(2), ITR 233(1), ITR 233(2)

Principal Issues: 1. Whether the payments under the AHCB, will be considered a social assistance payment pursuant to paragraph 56(1)(u).
2. If yes, will a T5007 be required to be issued to the Care Recipients?
3. Will the government of XXXXXXXXXX be required to issue a T4A?

Position: 1. Question of fact, but likely yes.
2. Question of fact, but likely yes. A reporting exception may be available, if payments from Care Recipient to Caregiver are made in respect of qualifying medical expenses.
3. Not likely.

Reasons: 1. The payments under the AHCB will likely be considered a social assistance payment pursuant to paragraph 56(1)(u).
2. Social assistance payments described in paragraph 56(1)(u) are reported on a T5007, unless the payment is specifically excluded from this reporting requirement. Paragraph 233(2)(a) of the Regulations excludes payments made in respect of qualifying medical expenses incurred by or on behalf of the payee.
3. Social assistance payments as described in paragraph 56(1)(u) are generally reported on a T5007 and are not described in subsection 200(2) of the Regulations.