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:
Can an employee transfer from one DSLP to another DSLP
Position TAKEN:
Yes, as long as the new plan meets all the requirements of 6801(a) of the Regulations and the maximum deferral period of the new plan includes the period of time already deferred.
Reasons FOR POSITION TAKEN:
April 20, 1995
TORONTO NORTH TAX SERVICES HEADQUARTERS
Director M.P. Baldwin
Assessing and Enquiries (613) 957-8953
Division
5-950843
Deferred Salary Leave Plan
This is in reply to a file forwarded from your office to this Directorate on March 28, 1995 concerning a letter sent to your office on July 4, 1995 which requested a technical interpretation concerning a deferred salary leave plan ("DSLP").
The fact situation given in the letter appears to be an actual fact situation and as noted in Information Circular 70-6R2, we do not express opinions on specific proposed transactions other than as a reply to an advance income tax ruling request. As such, the response must be provided by your office and accordingly we are returning the documents sent to this Directorate. However, we have reviewed the submission made and have the following comments.
It is the Department's position that an employee can transfer from one DSLP to another as long as the new plan meets all the requirements of paragraph 6801(a) of the Income Tax Regulations (the "Regulations") and that the maximum deferral period of the new plan includes the period of time already deferred under the previous plan.
However, if the new DSLP does not meet the requirements of paragraph 6801(a) of the Regulations, the deferred amounts and unpaid interest are required to be paid out of the DSLP to the employee and are taxable as employment income in the year the employee knows he or she will not continue participation in the original DSLP.
We trust our comments will be of assistance to you.
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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