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:
Eligible portion of retiring allowance and whether CMHC is related to Federal Public Service.
Position TAKEN:
Question of fact (and we don't have all the facts).
Reasons FOR POSITION TAKEN:
Routine
XXXXXXXXXX 951212
July 4, 1995
Dear XXXXXXXXXX:
Re: Retiring Allowance Eligible for Tax-Free Transfer to a Registered Retirement Savings Plan (RRSP)
This is in reply to your letter of April 30, 1995, in which you ask whether your years of employment with Canada Mortgage and Housing Corporation (CMHC) can be considered employment with an employer who is related to the Federal Public Service. Your question concerns the calculation of the eligible amount of a retiring allowance which will be received from Industry Canada and transferred to your RRSP and the deduction available under paragraph 60(j.1) of the Income Tax Act (the "Act").
Your question relates to a specific proposed transaction and we are unable to provide an answer except in the context of an advance income tax ruling. We can provide the following general comments to assist you, but they are not binding on the Department.
The amount of the retiring allowance for which a deduction is available under paragraph 60(j.1) of the Act is equal to $2000 times the number of years of employment before 1996 with the employer paying the retiring allowance and with a former employer who is related to the payer. An additional $1500 per year for those years of employment before 1989 is available where employer contributions to a pension plan or deferred profit sharing plan had not vested in respect of those years at the time the retiring allowance is paid.
Certain Crown corporations and agencies are related to the Federal Government departments. For example, all years of service with the Treasury Board of Canada as employer may be included in the calculation, as can years of service with an employer controlled by Her Majesty in Right of Canada. Some Crown corporations are not agents of Her Majesty in Right of Canada for all purposes and the advice of the particular employers should be obtained in order to confirm the Crown corporation's relation to the Treasury Board of Canada.
We trust our comments will be of assistance to you.
Yours truly,
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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