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.
| 24(1) |
5-9746 |
| |
J.D. Jones |
| |
(613) 957-2104 |
| Attention: 19(1) |
July 25, 1990
Dear Sirs:
Re: Paragraph 6(1)(f) of the Income Tax Act (the "Act") Group Disability Plan
This is in reply to your letter of March 9, 1990, wherein you requested a technical interpretation of paragraph 6(1)(f) of the Act in the following situation.
An individual is a member of a group disability plan the premiums on which are paid by his employer. Throughout his employment, he has had included in his income a taxable benefit with respect to the premiums paid by his employer. The individual is now disabled and is receiving income from the plan.
We note your comments that the employee has chosen to be taxed on the benefit with respect to the premiums paid by his employer to the plan rather than on the proceeds from the plan. In our view, as subparagraph 6(1)(a)(i) of the Act exempts the employer's contributions to a "group sickness or accident insurance plan" on behalf of the employee from the income of an employee, it is not to be at the employee's discretion to choose whether or not the employee will be taxed on this benefit. In this regard we would direct your attention to the comments contained in paragraph 17 of IT-428. Accordingly, any benefits received by the employee out of the plan will be subject to tax in the employee's hands pursuant to paragraph 6(1)(f) of the Act. In addition, no amount of contributions to the plan in this situation may be deducted under subparagraph 6(1)(f)(v) of the Act in computing the portion of amounts taxable under paragraph 6(1)(f) of the Act as the contributions to the plan are employer contributions and not employee contributions.
We trust our comments are of assistance to you
Yours truly,
for DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch
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