9 July 1993 External T.I. 9317455 F - Deferred Salary Leave Plan

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.

XXXXXXXXXX

Attention:  XXXXXXXXXX

Dear XXXXXXXXXX

RE:  Deferred Salary Leave Plan

Your letter of May 14, 1993, to the Hamilton District Taxation Office, requesting a review of your deferred salary leave plan, has been forwarded to the Rulings Directorate for reply.

We have reviewed the Plan and advise that it generally meets the requirements of paragraph 6801(a) of the Income Tax Act Regulations, however, we would suggest making the following adjustments:

1      Paragraph 14 should state that the interest income earned on the deferred amounts is salary, not interest for purposes of the Income Tax Act.

2      Paragraph 7(a) and the definition of "Leave of Absence" should indicate that a designated educational institution has the meaning assigned in subsection 118.6(1) of the Income Tax Act. Also, these provisions should indicate that the minimum leave is three or six consecutive months.

3      Subparagraph 6801(a)(i) of the Income Tax Act Regulations states that such plans must not be established to provide benefits on or after retirement. For greater certainty the preamble should include this statement.

If these adjustments are included it is our opinion that this plan would be in compliance with paragraph 6801(a) of the Income Tax Regulations, and, as such, deductions should be as stated in paragraphs 13 and 18 of the plan.

Yours truly,

for DirectorFinancial Industries DivisionRulings Directorate