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.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues:
Whether pay in lieu of notice is a retiring allowance and eligible for roll under 60(j.1).
Position TAKEN:
No - reversal of opinion in our letter 5-932975.
Reasons FOR POSITION TAKEN:
See Decision Summary 941225.
Department of Foreign Affairs and
International Trade
125 Sussex Drive 941225
Ottawa, Ontario
K1A 0G2
Attention: Mr. Bernard Brodie, Director
Locally Engaged Staff Abroad Division
July 29, 1994
Dear Sirs:
This is further to our telephone conversation of July 20, 1994 (Spice/Akyeampong), concerning our letter to you of October 21, 1993 (our file number 5-932975). As we advised Ms Akyeampong, we have reviewed the opinion in this letter and consider it wrong. Therefore, we are reversing our opinion and confirm that the lump-sum payment received by locally engaged employees in lieu of notice is employment income. As such, it is not eligible for the roll to the recipient's registered retirement income plan under paragraph 60(j.1) of the Income Tax Act.
Amounts received by employees prior to the date of our telephone conversation will not be denied treatment as retiring allowances and, to the extent permitted thereunder, the deduction under paragraph 60(j.1) will be available.
We apologize for any problems our mistake has occasioned.
Yours truly,
for Director
Financial Industries Division
Rulings Directorate
Policy and Legislation Branch
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