6 December 1996 External T.I. 9638615 - RETIRING ALLOWANCE QUESTION OF FACT

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: Treating a payment as a retiring allowance.

Position: General comments

Reasons: Routine information.

	               5-963861
XXXXXXXXXX		         Franklyn S. Gillman

Attention: XXXXXXXXXX

December 6, 1996

Dear Sirs:

Re: XXXXXXXXXX

This is in reply to your letter dated November 15, 1996 wherein you requested that the Department review and comment on a draft letter that was prepared for distribution to all employees of the above noted association for purposes of clarifying that a payment they received was mislabelled.

As stated in your above-mentioned letter, the facts that you described appear to relate to a completed transaction. Should the situation outlined in your letter relate to a completed transaction, you should consult with the relevant Tax Services Office. We are not in a position to give a response to your inquiry. However, we are prepared to make the following comments.

In our previous correspondence to you under file number 962465, the Department outlined some of its policies with regards to the payment of a retiring allowance. The only additional points we would add to our previous comments is that the determination of whether a particular amount would qualify as a retiring allowance is a question of fact which can only be resolved following a review of all the relevant facts and documentation relating to the particular transaction and that although a payment is classified as a retiring allowance, if the facts surrounding the payment do not qualify it as such, then the Department will not consider it to be one.

Yours truly,

for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate