4 November 1987 Income Tax Severed Letter 5-3938 - [871104]

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.

Revenue Canada Taxation Head Office

XXX

F. Francis (613) 957-3498

November 4, 1987

Dear Sirs:

This is in reply to your letter of September 25, 1987, wherein you requested a technical interpretation with respect to the proposed definition of "retirement compensation arrangements" ("RCA") contained in Bill C-64 which received second reading on June 30, 1987.

We agree with your position that a plan could be considered a "salary deferral arrangement" as that term is defined under subsection 248(1) of the Income Tax Act (the "Act") notwithstanding that the "deferred amount" is not included in income by virtue of the transitional rules contained therein. As a consequence thereof, these salary deferral arrangements would be excluded from the proposed definition of RCA and would ordinarily be subject to the rules applicable to "employee benefit plans" as that term is defined in the Act.

The above comments are an expression of opinion only and are not binding on the Department. They are, however, our best interpretation of the relevant proposed legislation as it would apply generally if enacted substantially as presently worded.

We trust the foregoing is of assistance.

Yours truly,

for Director Financial Industries Division Rulings Directorate Legislative and Intergovernmental Affairs Branch