14 December 1989 Ministerial Correspondence 32734 F - IT-428: Loan to Employer-paid Plan from Employee-paid Plan

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

December 14, 1989

Dear Sirs:

Re:  Interpretation Bulletin IT-428 Loan to Employer-paid Plan from Employee-paid Plan

This is in reply to your letter of October 10, 1989, wherein you requested an advance income tax ruling on the tax implications of proposed arrangements of long term disability plans in the following situation.

24(1)

24(1)

We advise that we are unable to provide the requested ruling as advance income tax rulings are given only in respect of proposed transactions and only when presented in the format set out in Information Circular IC 70-6R.  We wish to point out that the fee for this service has changed; charges are at the rate of $65 per hour with a deposit of $325 to accompany the original request.

Paragraph 17 of IT-428 makes the statement that it is a question of fact whether or not an employee-pay-all plan exists and the onus is generally on the employer to prove the existence of such a plan.  Whether or not such a plan exists would involve a finding of fact in each particular situation.  as a consequence we are reluctant to express an opinion about a contractual arrangement without having access to specific contracts and other documentation concerning the arrangement.

Notwithstanding the above 24(1)

24(1)

The foregoing represents a general interpretation of the law and, as such, may not be applicable in every situation.  We would be pleased to consider your situation as an advance income tax ruling when all the appropriate documentation has been submitted for our perusal.

Your deposit will be returned under separate cover.

Yours truly,

P.D. Fuocofor DirectorBusiness and General DivisionSpecialty Rulings DirectorateLegislative and IntergovernmentalAffairs Branch