25 July 1994 External T.I. 9413445 - CPP-LUMP-SUM SURVIVOR'S PENSION PAYMENT

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:

cpp-lump-sum survivor's pension-whether there is an administrative position to tax the amount in a fashion as found in 120.3 and 56(8) of the Act.

Position TAKEN:

56(8) allows an individual to exclude from income in the year of receipt CPP/Quebec disability benefits that relate to prior year (except where the prior yrear benefits are less than $300) and pay tax as if the benefits had been rec'd in the prior years to which they relate. There is no administrative position which applies to other similar type payments.

Reasons FOR POSITION TAKEN:

legislation was introduced as a result of admin. positions previously adopted. legis is explicit in allowing this treatment only to disability benefits.

			941344
XXXXXXXXXX	Sandra Short

Attention: XXXXXXXXXX

July 25, 1994

Dear Sirs:

Re: Canada Pension Plan: lump-sum survivor's pension payment

This is in reply to your letter of May 19, 1994 which queries whether there is an administrative policy which permits a recipient of a lump sum survivor's pension received under the Canada Pension Plan ("CPP") to be taxed on the amount in a fashion similar to that found in section 120.3 and subsection 56(8) of the Income Tax Act.

In the comments that follow, unless otherwise stated, all statute references are to the Income Tax Act S.C. 1970-71-72, c.63 as amended, consolidated to June 10, 1993 (the "Act").

Subsection 56(8) of the Act, added in 1991 and applicable to amounts received after 1989, allows an individual to exclude from income in the year of receipt CPP/Quebec disability benefits that relate to prior years (except where the prior year benefits are less than $300) and to pay tax on those benefits as if they had been received in the prior years to which they relate. The payment of tax on this basis is provided for in new section 120.3 of the Act. There is no administrative position which applies to other similar type payments.

We trust our comments will be of assistance to you.

Yours truly,

P.D. Fuoco
for Director
Business and General Division
Rulings Directorate
Policy and Legislation Branch