18 November 1997 External T.I. 9728825 - BACK PENSION INCOME INCLUSION

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:

Can any legislative or administrative relief be provided to reduce the tax burden where an underpayment of prior year pension benefits is paid in one year?

Position:

No.

Reasons:

The provisions of the Act clearly provide for the inclusion of the amount in income in the year it is received. XXXXXXXXXX

                                     		972882
XXXXXXXXXX             		              W.C. Harding

November 18, 1997

Dear Sir:

Re: XXXXXXXXXX

This is in reply to your letter of June 12, 1997, concerning your client XXXXXXXXXX, addressed to the Toronto West Tax Services Office. Your letter was referred to us for reply on October 30, 1997.

In your letter you suggest several ways to provide relief on the taxability of a lump sum payment received by XXXXXXXXXX that represents an underpayment of pension amounts paid for a number of years. We have to confirm that under the provisions of the Income Tax Act all amounts received out of a private pension plan are required to be reported for the year they are received. There are currently no provisions that will permit XXXXXXXXXX to average the income, spread the tax over a number of years or transfer it to a spousal RRSP.

XXXXXXXXXX

We trust this information will be of assistance to you.

Yours truly,

for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch