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 ISSUE:
Advising how to apply for advance ruling - particular issue is whether damages under human rights legislation is non-taxable or taxable as either employment income or retiring allwoance.
Position:
Explained what must be submitted.
Reasons:
Required by I.C. 70-6R3
972830
XXXXXXXXXX P. Spice
Attention; XXXXXXXXXX
January 21, 1998
Re: XXXXXXXXXX
This is in reply to your faxes of October 21, and November 27, 1997, in which you ask for a ruling on behalf of the above-named taxpayer.
In order to obtain an advance income tax ruling you must submit the information, documents, and fee as described in the enclosed Information Circular 70-6R3. Since the income tax characterization of the proposed payment affects the proposed recipient, it will also be necessary for your firm or another law firm to obtain her authorization for the advance ruling application.
Note that in respect of paragraphs 16(g) and (k) of the Information Circular we require your analysis of the potential application of section 6 and the definition of “retiring allowance” in subsection 248(1) of the Income Tax Act (the “Act”), why these provisions should not be applicable in this situation and the caselaw which should be applied or distinguished. To explain, if you are requesting a ruling that the payment is not taxable under the Act, it is necessary to explain why it is not income from a source as identified in the Act; in our view, the most likely source of the payment is employment (either paragraph 6(1)(a) or subsection 6(3) of the Act) or damages in respect of the loss of employment. Copies of the original complaint, all other documentation filed by the parties and, if any, by the Commission under the Human Rights and Multicultural Act, and the proposed terms of settlement should accompany your request.
We trust this information assists.
Yours truly,
for Director
Financial Industries Division
Income tax Rulings and
Interpretations Directorate
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© Her Majesty the Queen in Right of Canada, 1998
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