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: Will a retired person continue to be considered “retired from the workforce” where he or she does odd handy man projects during the summer?
Position: Question of Fact.
Reasons: The Department has certain established positions in respect of retirement for the purposes of retiring allowances and these positions should be applied equally when determining whether a person has retired from the workforce.
XXXXXXXXXX 982365
M. P. Sarazin
January 8, 1999
Dear Sir:
Re: Meaning of “Retires from the Workforce”
This is in reply to your letter dated September 8, 1998, wherein you request confirmation that you would still be considered to have retired from the workforce for purposes of Part XII.5 of the Income Tax Act (the “Act”) even though you have taken on a part-time job as of
July 13, 1998 in order to supplement your pension income.
In your letter you have outlined what appears to be an actual fact situation related to a past transaction. The review of such transactions falls within the responsibility of Tax Services Offices and it is the practice of this Department not to comment on such transactions without all of the facts relating to the particular situation. However, we can provide you with the following general comments which we hope will be of assistance.
Whether a person has retired from the workforce is a question of fact that could only be determined after a review of all of the relevant facts. However, the fact that a retired person accepts part-time employment to supplement his or her pension income should not generally, in and by itself, result in that person losing his or her status as a “retired person”. In determining whether a person has retired from the workforce, we would consider all of the facts related to the particular part-time employment in conjunction with the Department’s established positions in respect of retirement for the purposes of determining whether a payment qualifies as a retiring allowance for purposes of the Act.
Where a taxpayer chooses to have his or her LSVCC shares redeemed early without being subjected to taxes under Part XII.5 of the Act, it is the particular LSVCC that will be responsible for determining whether the taxpayer has retired from the workforce. The LSVCC could consult the relevant Tax Services Office where it cannot, based on the particular facts, conclude that an individual has retired from the workforce.
We trust that the above comments will be of assistance to you.
Yours truly,
Paul Lynch
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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