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.
Oct 20 1988
HEAD OFFICE Specialty Rulings Directorate J.D. Jones (613) 957-2104
SUBJECT: Treatment of Arbitration Awards
This is in reply to your memorandum of July 28, 1988 to Head Office, Source Deductions Division concerning the above-noted subject which has been referred to this Division for reply.
It is our understanding that these arbitration awards were received by XXXX. Based upon the documents submitted with your memorandum, we offer the following comments.
The amount of XXXX paid to XXXX is, in our view, a "retiring allowance" within the meaning of subsection 248(1) of the Income Tax Act (the "Act") as this amount represents a payment for loss of office or employment. This is consistent with the Department's views on this subject as stated in IT-337R2 particularly paragraphs 3 and 6.
The amounts paid to XXXX may be broken down into the following amounts:
(1) XXXX
(2) XXXX
(3) XXXX
(4) Payment of unused vacation leave credits.
In our view, the amounts listed in (1) and (2) above represent a "retiring allowance" within the meaning of subsection 248(1) of the Act as they are in respect of a loss of office or employment. XXXX. As a result, this amount is considered to be an amount excluded throw the taxpayers' income by virtue of subparagraph 6(1)(a)(i) of the Act. The amount in (4) above is considered to be ordinary remuneration and included in the taxpayers' income in the year of receipt pursuant to subsection 6(3) of the Act as stated in paragraph 5 of IT-337R2 .
We trust our comments will be of assistance.
ORIGINAL SIGNED BY
P. D. Fuoco
for Director Small Business and General Division Specialty Rulings Directorate Legislative and Intergovernmental Affairs Branch
c.c. HEAD OFFICE Source Deductions Division Research & Enquiries Section
c.c. Mr. R. Roy ADM, Policy & Systems Branch
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© Her Majesty the Queen in Right of Canada, 1988
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© Sa Majesté la Reine du Chef du Canada, 1988
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