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:
Whether sabbatical leave plan meets requirements of Reg. 6801(a).
Position:
No opinion on acceptability but note that interest income paid in year is considered employment income.
Reasons:
Routine
960152
XXXXXXXXXX P. Spice
Attention: XXXXXXXXXX
April 1, 1996
Dear Sirs:
Re: Employee Funded Sabbatical Leave Program
This is in reply to your letter of January 3, 1996, enclosing a copy of the above-named plan outline and requesting our comments concerning its acceptability.
We have reviewed the outline and advise that the interest earned on the deposits of deferred salary which must be paid each year to the employee is considered employment income for purposes of the Income Tax Act. (See clause 7.3 of ATR-39 which was previously provided to you.) This is not clearly explained in the outline under "Salary Administration" or in Appendix A. In all other respects the outline is satisfactory.
We hope these comments assist.
Yours truly,
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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