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:is retiring allowance paid by XXXXXXXXXX to spouse/employee reasonable?
Position TAKEN:Yes. A retiring allowance can be paid with respect to each year during which the spouse was employed.
Reasons:Prior rulings given. Conforms with law.
XXXXXXXXXX 3-962171
XXXXXXXXXX, 1996
Dear Sirs:
Re: Advance Income Tax Ruling
XXXXXXXXXX
This is in reply to your letter received on XXXXXXXXXX in which you requested an advance income tax ruling on behalf of the above noted taxpayers.
Facts
XXXXXXXXXX
XXXXXXXXXX was employed by XXXXXXXXXX in XXXXXXXXXX business from
XXXXXXXXXX
XXXXXXXXXX compensation from XXXXXXXXXX has been as follows:
XXXXXXXXXX
XXXXXXXXXX did not receive any remuneration for her employment XXXXXXXXXX due to the application of former subsection 74(3) of the Income Tax Act (the "Act").
XXXXXXXXXX does not plan on retiring from XXXXXXXXXX.
XXXXXXXXXX will retire from
XXXXXXXXXX
XXXXXXXXXX has no entitlements under any registered pension plans or deferred profit sharing plans as a result of her employment in the XXXXXXXXXX business.
Proposed Transactions
XXXXXXXXXX proposes to pay XXXXXXXXXX a retiring allowance of $XXXXXXXXXX on or after her retirement and in recognition for her years of service.
XXXXXXXXXX proposes to retire in XXXXXXXXXX and transfer the $XXXXXXXXXX retiring allowance to a registered retirement savings plan of which she is the annuitant as permitted under paragraph 60(j.1) of the Income Tax Act (the "Act").
To the best of your knowledge, none of the issues involved in this ruling are being considered by a District Office or Taxation Centre in connection with a tax return already filed, and none of the issues are under objection.
Rulings
Provided the above statement of facts and proposed transactions are accurate and constitute a complete disclosure of all relevant facts and provided the transactions are completed as proposed, we rule as follows:
A.For the purposes of section 67 of the Act, the retiring allowance proposed will be reasonable.
These rulings are given subject to the general limitations and qualifications set forth in Information Circular 70-6R2 dated September 28, 1990, issued by Revenue Canada Taxation, and are binding provided the proposed transactions are initiated on or before XXXXXXXXXX.
Yours truly,
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
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