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 amounts in a DSLP with one employer be transferred to a DSLP with another employer?
Position: Yes, as long as the new plan meets all the requirements of 6801(a) of the Regulations and the maximum deferral period of the new plan includes the period of time already deferred.
Reasons: We have ruled that transfers between related corporations are acceptable. This would be consistent.
December 15, 1999
CHARLOTTETOWN TSO HEADQUARTERS
D. A. Mahoney M.P. Sarazin
Director (613) 824-5441
Attention: Faye Webster
993094
Transfers Between Deferred Salary Leave Plans
This is in reply to your E-Mail of November 24, 1999, wherein you requested our comments regarding a participant's ability to transfer deferred amounts from a deferred salary leave plan, as described in paragraph 6801(a) of the Income Tax Regulations (the "Regulations"), with a current employer to a deferred salary leave plan ("DSLP")with another employer.
It is the Department's position that an employee can transfer from one employer's DSLP to another employer's DSLP as long as the new plan meets all the requirements of paragraph 6801(a) of the Income Tax Regulations (the "Regulations") and that the maximum deferral period of the new plan includes the period of time already deferred under the previous plan. Consequently, where the new employer has agreed to allow its new employee to participate in its DSLP and to recognize the new employee's participation in his or her former employer's DSLP, the deferred amounts under the new employee's participation in the former employer's DSLP would have to be transferred to the new employer's DSLP so that it could be paid out when the new employee takes his or her leave under the new employer's DSLP.
However, if the new employer's DSLP does not meet the requirements of paragraph 6801(a) of the Regulations, the deferred amounts and unpaid interest are required to be paid out of the DSLP to the employee and are taxable as employment income in the year the employee knows he or she will not continue participation in the original DSLP.
We trust our comments will be of assistance to you.
Patricia Spice
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
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