25 May 1992 Internal T.I. 9208967 F - Award For Wrongful Dismissal

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.

May 25, 1992

Scarborough District OfficePersonal and General SectionT.P.R. Complex Section 169-1-6

Attention: J. Yee

Award for wrongful dismissal

This is in reply to your round trip memorandum of March 16, 1992 in which you have asked for our comments with regards to the tax implications of the

24(1) The relevant facts can be summarized as follows:

24(1) 24(1)

Our comments

Subparagraph 56(1)(a)(ii) of the Income Tax Act (the "Act") states that:

"Without restricting the generality of section 3, there shall be included in computing the income of a taxpayer for a taxation year,

(a)     any amount received by a taxpayer in the year as, on account or in  lieu of payment of, or in satisfaction of,

      (...)

(ii) a retiring allowance, ..." "Retiring allowance"  is defined in subsection 248(1) of the Act as: "...an amount (other than a superannuation or pension benefit, an amount received as a consequence of death of an employee or a benefit described in subsection 6(1)(a)(iv) received

(a)...or

(b)     in respect of a loss of an office or employment of a taxpayer,     whether or not received as, on account or in lieu of payment of,   damages or pursuant to an order or judgment of a competent tribunal by the taxpayer or, after his death, by a dependant or a relation of the taxpayer or by the legal representative of the taxpayer;"

The Supreme Court of Canada has had to interpret the words "in respect of" which are used in the definition of retiring allowance. In The Queen v. Savage, 83 DTC 5409, and Nowegijick v. The Queen, 83 DTC 5041, the Supreme Court said:

"The words "in respect of" are, in my opinion, words of the widest possible scope. They import such meanings as "in relation to", "with reference to" or "in connection with". The phrase "in respect of" is probably the widest of any expression intended to convey some connection between two related subject matters."

24(1)

We trust our comments will be of assistance to you. We are returning herewith the file of 19(1) including the 19(1) assessed return.

Yours truly,

J.A. Szeszyckifor Chief, Personal and General SectionBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch

Enclosure.