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:
Lump sum payment representing share in pension benefits from 1990 to 1994 under a divorce decree
Position TAKEN:
Taxable under 56(1)(a)(i)
Reasons FOR POSITION TAKEN:
Right in the pension plan
5-943247
XXXXXXXXXX G. Martineau
Attention: XXXXXXXXXX
March 15, 1995
Dear Sirs:
Re: Taxation of pension income
This is in reply to your letter of December 14, 1994 concerning the fiscal implications of a payment representing a person's share in the pension benefits received by his\her former spouse from 1990 to 1993. This right to receive a share in the former spouse's pension plan was allowed under a divorce agreement in 1987. The former spouse died in 1994 and his executor will be remitting the pension arrears following an agreement reached by the spouses in 1994 before his death.
The comments set out in paragraph 11 of Interpretation Bulletin IT-499R apply to situations where the provincial family law legislation confers title to an interest in family assets. Our reading of the Court order submitted with your request suggests that the Court ordered the division of the pension assets between the spouses. In our view, the pension arrears paid by the executor are taxable in the year where the payment is received.
We contacted Mr. Jim Simpson of the Winnipeg District Office who agreed that you communicate with him regarding the possibility to reassess the non-statute barred taxation years of the former spouse.
The above comments reflect an expression of opinion only and are not binding on the Department, as explained in paragraph 21 of Information Circular 70-6R2. We trust, however, that they are of assistance.
Yours truly,
for Director
Financial Industries Division
Rulings Directorate
c.c.: Jim Simpson
Winnipeg District Office
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