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.
D.Y. Dalphy (613) 957-2134
May 1, 1987
Dear Sirs:
Re: Wrongful Dismissal Awards
This is in reply to your letter dated March 18, 1987. The Department's position is as follows:
1. Legal costs which were essential to incur in respect of and directly relate to the conduct of an action for wrongful dismissal will not, to the extent that such costs were actually incurred by a taxpayer, be considered to form part of a retiring allowance. Accordingly, withholding tax on such amounts will not be required.
2. Amounts received by a taxpayer in 1984 and subsequent taxation years pursuant to a settlement of or judgment in a wrongful dismissal or personal injury action as pre-judgement or pre-settlement interest are not included in income. Accordingly, withholding tax will not be required on the payment of such amounts.
We trust this information will be of assistance to you.
Yours truly,
ORIGINAL SIGNED BY
for Director Small Business and General Division Specialty Rulings Directorate Legislative and Intergovernmental Affairs Branch
248(1)R 56(1)(a)(ii) 12(1)(c)
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 1987
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 1987
Email this Content