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 amount paid out of a SAR plan a retiring allowance
Position:
Based on albino case it might be. but in this case tp to late to get a transfer.
Reasons:
Routine
XXXXXXXXXX 970366
March 3, 1997
Dear XXXXXXXXXX:
Re: Transfers of amounts to an RRSP
This is in reply to your letter of July 25, 1996 in respect of the transfer of amounts to an RRSP. We apologize for the delay in our reply, however, your letter was originally sent to the Ottawa Taxation Centre, and was not referred to us for reply until February 7, 1997. Please note that we received your letter and a statement of your former employer. We did not receive any copies of the "XXXXXXXXXX" literature issued by your former employer as referred to in your letter.
In your letter you asked us to confirm that the amount you received in May 1995, from your previous employer could be treated as a retiring allowance so that you could transfer a portion of it to an RRSP. In this respect we must first note that while a retiring allowance may generally be transferred to an RRSP in accordance with the terms of the Income Tax Act, the amount must be transferred within 60 days of the end of the year in which the amount is received. Accordingly, since you received the amount in 1995, you would have had to transfer it to an RRSP by March 1 1996, in order to obtain any deduction. There is no means by which this deadline can be extended in order to allow you a deduction at this time.
We would also like to note that you may or may not have been able to treat the payment you received as a retiring allowance if it had been transferred to an RRSP on receipt. This would have depended on the terms of your former employer's plan. In most cases, payments made out of these types of plans must be treated as employment income. However, if the terms are such that the payments may also be considered to be in recognition of an employee's long service, they may also be treated as payments of a retiring allowance. In this respect you may wish to refer to a recent decision of the Federal Court-Trial Division in Her Majesty the Queen v. George R. Albino, 94 DTC 6071.
We regret that our reply could not be more favourable.
Yours truly,
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 1997
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 1997
Email this Content