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:
Will acceptance of employment with former employer affect status of retiring allowance.
Position TAKEN:
No
Reasons FOR POSITION TAKEN:
Acceptance of an offer made after termination does not indicate continued employment.
August 3, 1995
Client Services Headquarters
Windsor Tax Services Office D.Duff
(613) 957-8953
Attention: Diane Masaro
952001
Retiring Allowance from XXXXXXXXXX
This is in reply to your memorandum of July 27, 1995, requesting our opinion on whether we consider the amount paid to be a retiring allowance.
XXXXXXXXXX
She has repeatedly been approached by XXXXXXXXXX with an offer of part time employment which she has not accepted because of concern about the status of her retiring allowance. It is likely that her concern is based on the position in paragraph (4) of IT-337R2 which basically states that a retirement or loss of office excludes termination followed shortly by employment with an affiliate. You have requested our opinion on whether we consider the amount to be a retiring allowance.
It has been our position that employment must be terminated for an amount to be a retiring allowance. Our position on rehiring is based more on the time of the offer to rehire than on the length of time between termination and rehiring. If a person is terminated, and receives a termination payment, without any assurance of being rehired it is our position that the payment can be a retiring allowance. If the person is subsequently rehired the nature of the payment will not change. On the other hand where the person is given assurance before termination of being rehired, and is subsequently rehired, we do not consider a loss of employment to have occurred.
In the present situation, XXXXXXXXXX was terminated effective January 31, 1995 and had received an offer of part time employment prior to that date. She has not accepted the offer and has since received subsequent offers of the same nature. In our opinion, acceptance of the latest offer of employment will not affect the status of the amount paid on termination.
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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