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.
G. Thornley (613)957-2101
September 29, 1987
Dear Sirs:
Re: Section 12.2 of the Income Tax Act
This is in reply to your letter of July 24, 1987, requesting an interpretation of the tax consequences relating to a product currently being developed by your firm.
As discussed with you over the telephone on September 15, 1987, the matters raised in your letter are more appropriately the subject of an advance income tax ruling. Also as discussed with you during our telephone conversation, paragraph 23 of Information Circular 70-6R states that written opinions concerning proposed transactions will not in general be given. Thus we are unable to comment on the specific issues raised in your letter other than to point out that we have previously stated that each insured employee under a group term life insurance plan is considered to have a life insurance policy with the plan's insurer. Any taxable income arising under the provisions of section 12.2 of the Act will be considered to be that of the employee and not that of the employer.
With respect to calculations required by various provisions of the Act and the Income Tax Regulations (the "Regulations") it is the Department's view that a determination of the correctness of a calculation can only be made after the fact and as the result of an audit by District Taxation Office staff. Additionally, where a particular method of calculation is indicated in a provision of the Act or Regulations it is expected that that particular method of calculation will be used by taxpayers. However, as this is related to our audit function you may wish to discuss this with your local District Office. In this regard we refer you to Mr. George Pottage in the Kitchener District Office at (519)597-6060.
As indicated earlier our comments are of a general nature only and are not to be construed in any way as an advance income tax ruling.
We trust these comments will be of some use to you.
Yours truly,
for Director Small Business and General Division Specialty Rulings Directorate Legislative and Intergovernmental Affairs Branch
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