Income Tax Severed Letters - 2025-03-19

Technical Interpretation - External

11 February 2025 External T.I. 2024-1045391E5 - Indian Act tax exemption and Employment Income

Unedited CRA Tags
81(1)(a); Indian Act 87

Principal Issues: Do any of the Indian Act Exemption for Employment Income Guidelines apply to the employment income of an employee who lives on reserve and, pursuant to a work arrangement, is required to perform more than 50% of their duties from their on-reserve home office?

Position: Yes.

Reasons: The conditions for Guideline 3 appear to be met.

21 January 2025 External T.I. 2024-1041441E5 - Return of Premium Life Insurance Policy

Unedited CRA Tags
56(1)(j), 148(1), 148(9), Reg 308
Summary Under
Tax Topics - Income Tax Act - Section 148 - Subsection 148(9) - Proceeds of the Disposition
a return of premiums at maturity of a term life insurance policy can be mostly income

Principal Issues: We were asked to provide comments on the taxation of a return of premium payment made to a taxpayer by a life insurance company upon the maturity of a term life insurance policy.

Position: General comments provided.

Reasons: Legislation.

14 January 2025 External T.I. 2024-1040541E5 - Status of Lands in Additions to Reserve process

Unedited CRA Tags
ITA para. 81(1)(a); IA s. 87

Principal Issues: Whether the employment income earned from work performed on lands under the Additions to Reserve process is situated on a reserve.

Position: Based on the information provided, no.

Reasons: The employment income from work performed on these lands is not situated on a reserve; therefore, the employment income is not exempt from tax under section 87 of the Indian Act and paragraph 81(1)(a) of the Act.