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.
April 22, 1993
| North York District Office |
Head Office |
| Client Assistance |
Financial Industries Division |
| |
D. Duff (613) 957-8953 |
Attention: Kate Ho
XXXXXXXXXX
Deferred Salary Leave Plan ("DSLP"):
This is in reply to your correspondence forwarded by facsimile on April 15, 1993, regarding the DSLP of the aforementioned client.
The criteria for these DSLPs are in paragraph 6801(a) of the Income Tax Regulations. If a plan meets these criteria it is prescribed not to be a salary deferral arrangement with the consequence that the employee is not required to include the deferred amounts in income when earned and will include them when received during his period of leave. We assume the agreement entered into by XXXXXXXXXX meets these criteria, although the letter from his employer, dated March 25, 1991, states that a teacher may defer for any number of years, but subparagraph 6801(a)(i) limits the deferral period to six years. XXXXXXXXXX original plan has a four year deferral period followed by a one year period of leave which meets the requirements in paragraph 6801(a) on these points.
His first question was could he stop deferring amounts without otherwise affecting the plan. Subparagraph 6801(a)(ii) limits the maximum annual deferral to one third of his salary but there is no minimum and no requirement to defer anything. Consequently not making deferrals during one or more of the years in the deferral period will not contravene regulation 6801.
His second question relates to the timing of the leave period.
XXXXXXXXXX
There are implications in Regulation 6801 resulting from the commencement and length of the period of leave. Subparagraph 6801(a)(v) requires the participant to return to his employment for a period equal to the period of leave and subparagraph 6801(a)(vi) requires the deferred amounts to be paid out by the end of the calendar year commencing after the end of the deferral period, which in our opinion, as noted above, would be XXXXXXXXXX.
It is our understanding that you will be communicating the Department's position on these matters to XXXXXXXXXX
Director Financial Industries DivisionRulings Directorate
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, 1993
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, 1993
Email this Content