14 February 2008 Internal T.I. 2007-0256401I7 F - Vente d'un surplus actuariel

Unedited CRA Tags

56(1)a)(i) 248(1)

View modes

Translation

Translation disclaimer

This translation was prepared by Tax Interpretations Inc. The CRA did not issue this document in the language in which it now appears, and is not responsible for any errors in its translation that might impact a reader’s understanding of it or the position(s) taken therein. See also the general Disclaimer below.

Principal Issues: [TaxInterpretations translation] What is the tax treatment of the sale of an employer's interest in the actuarial surplus of a pension plan?

Position: By virtue of subparagraph 56(1)(a)(i), the proceeds of the sale must be included in the vendor's income in the taxation year in which they are received.

Reasons: According to the facts, the proceeds from the sale of the actuarial surplus constitute a payment in respect of a retirement or pension benefit.

								February 14, 2008

XXXXXXXXXX Tax Services Office            	Headquarters
XXXXXXXXXX 							Income Tax Rulings Directorate
Important Files Section 			   
								Michel Lambert, CA, M.Fisc.
Attention: XXXXXXXXXX 		      		(613) 957-8968

								2007-025640

XXXXXXXXXX
Sale of the XXXXXXXXXX

This is further to your memorandum of November 21, 2007 regarding the sale of the actuarial surplus of the Pension Plan for Employees of XXXXXXXXXX Corporation.

Unless otherwise indicated, all statutory references herein are to provisions of the Income Tax Act (the "Act").

Names of the parties

XXXXXXXXXX. The Vendor

XXXXXXXXXX The Purchaser

The Pension Plan for Employees of the XXXXXXXXXX Corporation The Plan

The Régie des rentes du Québec The Regulatory Authority

The Facts

1. On XXXXXXXXXX, the Vendor sold all the assets of its XXXXXXXXXX division for $XXXXXXXXXX, including its rights and obligations as a participating employer in the Plan for its employees.

2. Clause XXXXXXXXXX of the sale agreement indicates how the total sale price was allocated to the various assets sold. The parties allocated $XXXXXXXXXX to the actuarial surplus of the Plan.

3. Clause XXXXXXXXXX of the sales contract states that the transfer of the rights and obligations of the Vendor as a participating employer in the Pension Plan from the Vendor to the Purchaser constitutes an amendment to the Plan which is subject to the approval of the Regulatory Authority.

4. In clause XXXXXXXXXX of the sales contract, the Purchaser acknowledges that there is no guarantee as to the ownership of the surplus in the event of termination of the Plan.

5. Clause XXXXXXXXXX of the Plan provides in part as follows:

XXXXXXXXXX [...] All contributions to the Plan will be made to the pension fund, which is not part of the income or assets of the corporation [the Vendor].

XXXXXXXXXX [...]

XXXXXXXXXX The fund consists of the following contracts:

XXXXXXXXXX

XXXXXXXXXX [...]

XXXXXXXXXX If at any time a surplus arises from the operation of the Plan which is not required to meet existing actuarial liabilities, as determined by the actuary, such surplus shall, subject to any relevant legislation, be refunded to the Corporation [the Vendor] where it shall be applied to meet the Corporation's obligations in respect of the cost of benefits under the Plan for the current and future years. [...]

Your Opinion

6. You are of the view that the actuarial surplus should be included in income for the taxation year in which the amount is received, with this inclusion being pursuant to subparagraph 56(1)(a)(i).

7. In your opinion, the receipt of the amount of $XXXXXXXXXX constitutes a superannuation or pension benefit, within the meaning of that expression in subsection 248(1). In support of your view, you referred to the preamble to that expression, which states that a superannuation or pension benefit includes any amount received out of or under a superannuation or pension fund or plan. According to you, this expression does not only include amounts received from the plan but also amounts received from another entity. You also refer to paragraph (b) of the definition of that term which provides that a payment to an employer of a beneficiary of a pension plan “resulting from an amendment to or modification of the fund or plan” is a pension benefit.

Vendor’s Opinion

8. The Vendor is of the view that there is no provision in the Act that requires an employer to include the repayment of an actuarial surplus in income.

9. The Vendor refers to a passage in interpretation E9229497 where we stated the following:

The relevant provision governing an income inclusion with respect to a pension plan is subparagraph 56(1)(a)(i) of the Act and an employer will be taxed under the provision only where an amount is paid out of the plan to the employer.

10. The Vendor argues that subparagraph 56(1)(a)(i) does not apply because the amount in question is received from the Purchaser and not from the Plan. It adds that the Supreme Court has stated that the words must be read in context, i.e., in light of the general spirit of the Act.

11. The Vendor is also of the view that this is a capital transaction, namely a sale of a business.

12. Finally, the Vendor claims that the sum of $XXXXXXXXXX is attributable to the sale of goodwill as it cannot be attributed to any other asset.

Your Question

13. You asked whether the amount of $XXXXXXXXXX is a superannuation or pension benefit that must be added to the Vendor's income pursuant to subparagraph 56(1)(a)(i).

Our Opinion

14. Section 248(1) defines a superannuation or pension benefit as follows

superannuation or pension benefit includes any amount received out of or under a superannuation or pension fund or plan and, without restricting the generality of the foregoing, includes any payment made to a beneficiary under the fund or plan or to an employer or former employer of the beneficiary thereunder

(a) in accordance with the terms of the fund or plan,

(b) resulting from an amendment to or modification of the fund or plan, or

15. We are of the view that the $XXXXXXXXXX paid by the Purchaser is not a superannuation or pension benefit as it is not paid out of or under a superannuation or pension fund or plan but rather as part of the sale of the assets of a division of the Vendor. Nor is it an amount paid to the Vendor pursuant to the terms of the fund or plan or resulting from the termination of the fund or plan. We are also of the view that it is not an amount paid to the Vendor as a result of an amendment to the fund or plan. Rather, it is the Plan that will be amended as a result of the payment to the Vendor of $XXXXXXXXX.

16. Subject to certain exceptions that do not apply in this case, subparagraph 56(1)(a)(i) provides that a taxpayer must include in computing income for a taxation year any amount received by the taxpayer in the year as, on account or in lieu of payment of, a superannuation or pension benefit. That subparagraph does not refer to the payer. Thus, whether the payer is a pension plan, a pension fund or another person is not a determining factor. Consequently, the fact that the $XXXXXXXXXX was paid by the Purchaser is not in itself a bar to the application of subparagraph 56(1)(a)(i).

17. In our view, it is necessary to establish whether the amount of $XXXXXXXXXX constitutes an amount received “on account or in lieu of payment of” of a superannuation or pension benefit.

18. The English version of the Act translates the phrase as “on account or in lieu of payment of, or in satisfaction of”. The term "in lieu of" was discussed in Transocean Offshore Ltd. v. Her Majesty the Queen¹ where the Federal Court of Appeal stated

However, paragraph 212(1)(d) of the Income Tax Act also includes a payment made in lieu of compensation for the use, in Canada, of property. The ordinary meaning of the phrase "in lieu of", according to a number of dictionaries, is "instead of" or "in place of": Black's Law Dictionary (7th ed., 1999), The Canadian Oxford Dictionary (2001, Oxford University Press), Gage Canadian Dictionary (1983, Gage Publishing Limited), The Canadian Dictionary of English Law (2nd ed. 1995 Thomson Canada Limited). It seems axiomatic that an amount that is paid instead of a payment of a particular legal character, or in the place of such a payment, does not have that same legal character. Parliament, in using the words "in lieu of" in paragraph 212(1)(d), must have intended to expand the scope of paragraph 212(1)(d) to include payments other than payments that have the legal character of rent.

[...]

As mentioned above, the ordinary meaning of that phrase connotes something that takes the place of something else or is a substitute for something else. Theoretically, a thing may take the place of another thing if it performs exactly the same function as that other thing, or if it performs a function that is not exactly the same but is a reasonable substitute. [...]

19. It must therefore be determined whether the amount of $XXXXXXXXXX received by the Vendor from the Purchaser is a reasonable substitute for a superannuation or pension benefit.

Under this definition in subsection n 248(1), a payment made to an employer or former employer of a beneficiary in accordance with the terms of a pension fund or plan is a superannuation or pension benefit. Under the terms of the plan, a surplus that is not required to meet existing actuarial liabilities, as determined by the actuary, could be refunded to the corporation (the Vendor) or allow it to take a contribution holiday for the year in question and subsequent years.

In our view, such a payment of that excess would constitute a superannuation or pension benefit that should be included under subparagraph 56(1)(a)(1) in the Vendor's income for the taxation year in which the amount is received. Instead of obtaining a refund under the terms of the Plan, the Vendor elected to assign its rights to the Purchaser in consideration for a payment of $XXXXXXXXXX. We are of the view that that payment is a reasonable substitute for the superannuation or pension benefit that it could have received directly from the Plan. Consequently, by virtue of subparagraph 56(1)(a)(i), that amount must be included in the Vendor's income for the taxation year in which it is paid to it.

20. In closing, the question arises as to whether the English and French versions of the Act produce the same result. In that regard, the court in Transocean Offshore Ltd.2 concluded that the French expression "au titre de" was at least as broad as the corresponding English expression. In reaching this conclusion, it considered that the French version sometimes uses the expression "au titre de" whereas the English version uses the expression "in respect of". Referring to Nowegijick v. The Queen³ , the Court recalled that the expression "in respect of" must be interpreted broadly. In that respect, the relevant passage in Transocean Offshore Ltd. reads as follows

[53] Counsel for Transocean argues that the French version of paragraph 212(1)(d) of the Income Tax Act is narrower than the English version, because the French phrase "au titre" means "as", and does not mean "instead of". Counsel for the Crown answers this argument by explaining, with numerous references to the legislative history of the French version of the Income Tax Act, that the French phrase "au titre" is used in the French version of the Income Tax Act to mean "in respect of". The phrase "in respect of" has been described as "the widest of any expression intended to convey some connection between related subject matters": Nowegijick v. The Queen, [83 DTC 5041] [1983] 1 S.C.R. 29, per Dickson, J., writing for the Court at page 39.

[54] The French version of the statutory provision considered in Nowegijick was not "au titre", it was "quant à". However, the Nowegijick definition of the phrase "in respect of" was applied in The Queen v. Savage, [83 DTC 5409] [1983] 2 S.C.R. 428, in which the statutory provision in issue used the phrase "in respect of" in the English version and "au titre" in the French version. The case involved an employee of a life insurance company who received from her employer $300 as a result of passing certain examinations she had taken, voluntarily and on her own time, to improve her understanding of the life insurance business. There was a dispute as to whether the $300 was taxable as income from employment on the basis that it was, in the words of what was then paragraph 6(1)(a) of the Income Tax Act, R.S. 1970-71-72, c. 63, a benefit or advantage (emphasis added):

[...] in respect of, in the course of, or by virtue of an office or employment.

[...] au titre, dans l'occupation ou en vertue de la charge ou de l'emploi.

[55] Dickson, J., writing for the majority, held that the payment fell within this provision. (He went on to conclude that the payment was exempt from tax because it also came within the scope of a more specific provision, paragraph 56(1)(n) of the Income Tax Act, which taxed certain awards, but only over $500.).

[56] Given the manner in which the French phrase "au titre" is typically used in the French version of the Income Tax Act, the Crown has the better side of this debate. I conclude that the French version of paragraph 212(1)(d) of the Income Tax Act is at least as broad as the English version.

Regarding the application of subparagraph 56(1)(a)(i) to the amount of $XXXXXXXXXX, we are of the view that the English and French versions of the Act produce the same result.

Conclusion

21. In our view, the $XXXXXXXXXX is not a superannuation or pension benefit but must still be included in the Vendor's income, for the taxation year in which it is received by virtue of subparagraph 56(1)(a)(i) as it is a reasonable substitute for a superannuation or pension benefit.

22. The approach we have used in this case is the same as that taken by the Tax Court of Canada in Michael Holzhey v. Her Majesty the Queen,⁴ which dealt with the application of paragraph 12(1)(c).

Access to Information

23. For your information, unless exempted, a copy of this memorandum will be severed using the Access to Information Act criteria and placed in the Canada Revenue Agency's electronic library. A severed copy will also be distributed to the commercial tax publishers for inclusion in their databases. The severing process will remove all material that is not subject to disclosure, including information that could disclose the identity of the taxpayer. Should your client request a copy of this memorandum, the electronic library version can be provided. Alternatively, the client may request a severed copy using the Privacy Act criteria, which does not remove client identity. Requests for this latter version should be made by you to Ms. Jackie Page at (819) 994-2898. A copy will be sent to you for delivery to the client.

We hope that these comments are of assistance.

Manager
Financial Sector and Exempt Entities Section
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch.

ENDNOTES

¹ FCA, 2005 DTC 5201, paras. 47 and 60
² id. paras. 53 to 56
³ 83 DTC 5041; 1 S.C.R. 29
⁴ 2007 TCC 247

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

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.

Text of Severed Letter

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.

Accès à l'information

Principales Questions: Quel est le traitement fiscal de la vente des droits d'un employeur dans le surplus actuariel d'un régime de pension?

Position Adoptée: En vertu du sous-alinéa 56(1)a)(i), le produit de la vente doit être ajouté au revenu du vendeur dans l'année d'imposition où il est reçu.

Raisons: Selon les faits, le produit de la vente du surplus actuariel constitue un paiement au titre d'une prestation de retraite ou de pension.

								Le 14 février 2008

Bureau des services fiscaux de XXXXXXXXXX 	Administration centrale
XXXXXXXXXX 							Direction des décisions
Section des dossiers importants 			   en impôt
								Michel Lambert, CA, M.Fisc.
À l'attention de XXXXXXXXXX 				(613) 957-8968

								2007-025640

XXXXXXXXXX
Vente de la XXXXXXXXXX

La présente fait suite à votre note de service du 21 novembre 2007 concernant la vente du surplus actuariel du Régime de retraite des employés de la compagnie XXXXXXXXXX.

À moins d'indication contraire, tous les renvois législatifs dans la présente sont des renvois aux dispositions de la Loi de l'impôt sur le revenu (la "Loi").

Nom des parties

XXXXXXXXXX . Le Vendeur
XXXXXXXXXX L'Acquéreur
Le Régime de retraite des employés de la compagnie XXXXXXXXXX
Le Régime
La Régie des rentes du Québec L'organisme de réglementation

Les faits

1. Le XXXXXXXXXX, le Vendeur a vendu tous les éléments d'actifs de sa division de XXXXXXXXXX pour une somme de XXXXXXXXXX $, incluant ses droits et obligations à titre d'employeur participant au Régime pour le compte de ses employés.

2. Le point XXXXXXXXXX du contrat de vente indique comment le prix de vente total est ventilé entre les différents éléments d'actifs vendus. Les parties ont accordé un montant de XXXXXXXXXX $ à l'excédent actuariel du Régime.

3. Le point XXXXXXXXXX du contrat de vente stipule que le transfert du Vendeur à l'Acquéreur des droits et obligations du Vendeur à titre d'employeur participant au Régime de retraite constitue une modification du Régime qui est subordonnée à l'autorisation de l'Organisme de réglementation.

4. Au point XXXXXXXXXX du contrat de vente, l'Acquéreur reconnaît qu'il n'y a aucune garantie quant à l'appartenance des surplus en cas de terminaison du Régime.

5. La clause XXXXXXXXXX du Régime prévoit en partie ce qui suit:

XXXXXXXXXX [...] Toutes les cotisations destinées au R[r]égime seront versées à la caisse de retraite, laquelle ne fait pas partie du revenu ni de l'actif de la compagnie [le Vendeur].

XXXXXXXXXX [...]

XXXXXXXXXX La caisse est composée des contrats suivants:

XXXXXXXXXX

XXXXXXXXXX [...]

XXXXXXXXXX Si en tout temps, il résulte de la gestion du R[r]égime un excédent qui n'est pas nécessaire à la satisfaction aux engagements actuariels existants, déterminés par l'actuaire, ledit excédent, sous réserve de toute législation pertinente, sera remboursé à la compagnie [le Vendeur] où il sera affecté à compenser les obligations de la compagnie face aux coûts des prestations prévues au R[r]égime pour l'année courante et pour les années ultérieures. [...]

Votre opinion

6. Vous êtes d'avis que le surplus actuariel doit être inclus dans le revenu pour l'année d'imposition où le montant est reçu, cette inclusion devant se faire en vertu du sous-alinéa 56(1)a)(i).

7. Selon vous, la réception du montant de XXXXXXXXXX $ constitue une prestation de retraite ou pension, au sens de cette expression au paragraphe 248(1). À l'appui de votre opinion, vous référez au préambule de cette expression qui édicte qu'une prestation de retraite ou de pension comprend les sommes reçues dans le cadre d'une caisse de retraite ou d'un régime de pension. Selon vous, cette expression n'inclut pas seulement les montants reçus du régime mais aussi les sommes reçues d'une autre entité. Vous référez aussi à l'alinéa b) de la définition de ladite expression qui prévoit qu'un versement fait à un employeur d'un bénéficiaire d'un régime de pension " par suite d'une modification apportée à la caisse de retraite ou au régime " constitue une prestation de pension ou de retraite.

Opinion du Vendeur

8. Le Vendeur est d'avis qu'il n'existe aucune disposition dans la Loi qui exige d'un employeur qu'il inclut l'amortissement d'un surplus actuariel dans son revenu.

9. Le Vendeur réfère à un passage de l'opinion E9229497 où nous avons indiqué ce qui suit:

The relevant provision governing an income inclusion with respect to a pension plan is subparagraph 56(1)(a)(i) of the Act and an employer will be taxed under the provision only where an amount is paid out of the plan to the employer.

10. Le Vendeur soutient que le sous-alinéa 56(1)a)(i) ne s'applique pas parce que le montant en cause est reçu de l'acheteur et non pas du Régime. Il ajoute que la Cour suprême a mentionné qu'il faut lire les mots dans leur contexte, c'est-à-dire eu égard à l'esprit général de la Loi.

11. Le Vendeur est aussi d'avis qu'il s'agit d'une transaction de nature capitale, à savoir une vente d'entreprise.

12. Finalement, le Vendeur prétend que la somme de XXXXXXXXXX $ est attribuable à la vente de l'achalandage car elle ne peut pas être attribuée à aucun autre élément d'actif.

Votre question

13. Vous nous demandez si le montant de XXXXXXXXXX $ constitue une prestation de retraite ou de pension qui doit être ajouté au revenu du Vendeur en vertu du sous-alinéa 56(1)a)(i).

Notre opinion

14. Le paragraphe 248(1) définit une prestation de retraite ou de pension en ces termes:

Sont compris parmi les prestations de retraite ou de pension les sommes reçues dans le cadre d'une caisse ou d'un régime de retraite ou de pension, et, notamment, tout versement fait à un bénéficiaire dans le cadre de la caisse ou du régime, ou à un employeur ou ancien employeur du bénéficiaire:

a) conformément aux conditions de la caisse ou du régime;

b) par suite d'une modification apportée à la caisse ou au régime;

c) par suite de la liquidation de la caisse ou du régime.

15. Nous sommes d'opinion que le montant de XXXXXXXXXX $ que l'Acheteur a versé ne constitue pas une prestation de retraite ou de pension puisque cette somme n'est pas payée dans le cadre d'une caisse ou d'un régime de retraite mais plutôt dans le cadre de la vente des actifs d'une division du Vendeur. Il ne s'agit pas non plus d'une somme versée au Vendeur conformément aux conditions de la caisse ou du régime ni par suite d'une liquidation. Nous sommes aussi d'avis qu'il ne s'agit pas d'une somme versée au Vendeur par suite d'une modification apportée à la caisse ou au régime. À l'inverse, c'est plutôt le Régime qui sera modifié par suite du paiement au Vendeur de la somme de XXXXXXXXXX $.

16. Sous réserve de certaines exceptions qui ne s'appliquent pas en l'espèce, le sous-alinéa 56(1)a)(i) édicte qu'un contribuable doit inclure dans le calcul de son revenu pour une année d'imposition toute somme qu'il a reçue au cours de l'année à titre ou en paiement intégral ou partiel d'une prestation de retraite ou de pension. Ce sous-alinéa ne fait pas référence au payeur. Ainsi, que le payeur soit un régime de pension, une caisse de retraite ou une autre personne ne constitue pas un facteur déterminant. Par conséquent, le fait que le montant de XXXXXXXXXX $ ait été versé par l'Acheteur ne constitue pas en soi un obstacle à l'application du sous-alinéa 56(1)a)(i).

17. À notre avis, il faut établir si le montant de XXXXXXXXXX $ constitue une somme reçue "au titre, ou en paiement intégral ou partiel", d'une prestation de retraite ou de pension.

18. La version anglaise de la Loi traduit l'expression "au titre, ou en paiement intégral ou partiel", par "on account or in lieu of payment of, or in satisfaction of". L'expression "in lieu of" a été analysée dans la décision Transocean Offshore Ltd. v. Her Majesty the Queen¹ ou la Cour d'appel fédérale mentionne ce qui suit:

However, paragraph 212(1)(d) of the Income Tax Act also includes a payment made in lieu of compensation for the use, in Canada, of property. The ordinary meaning of the phrase "in lieu of", according to a number of dictionaries, is "instead of" or "in place of": Black's Law Dictionary (7th ed., 1999), The Canadian Oxford Dictionary (2001, Oxford University Press), Gage Canadian Dictionary (1983, Gage Publishing Limited), The Canadian Dictionary of English Law (2nd ed. 1995 Thomson Canada Limited). It seems axiomatic that an amount that is paid instead of a payment of a particular legal character, or in the place of such a payment, does not have that same legal character. Parliament, in using the words "in lieu of" in paragraph 212(1)(d), must have intended to expand the scope of paragraph 212(1)(d) to include payments other than payments that have the legal character of rent.

[...]

As mentioned above, the ordinary meaning of that phrase connotes something that takes the place of something else or is a substitute for something else. Theoretically, a thing may take the place of another thing if it performs exactly the same function as that other thing, or if it performs a function that is not exactly the same but is a reasonable substitute. [...]

19. Il faut donc établir si le montant de XXXXXXXXXX $ que le Vendeur a reçu de l'Acheteur est un substitut raisonnable versé en remplacement d'une prestation de retraite ou de pension.

Selon cette définition au paragraphe 248(1), un versement fait à un employeur ou un ancien employeur d'un bénéficiaire conformément aux conditions de la caisse de retraite ou du régime de pension est une prestation de retraite ou de pension. Selon les termes du régime, un excédent qui n'est pas nécessaire à la satisfaction aux engagements actuariels existants, déterminés par l'actuaire, pouvait être remboursé à la compagnie (le Vendeur) ou lui permettre de prendre un congé de primes pour l'année en question et les années subséquentes.

À notre avis, un tel versement de cet excédent constituerait une prestation de retraite ou de pension qui selon le sous-alinéa 56(1)a)(1) devrait être ajouté au revenu du Vendeur pour l'année d'imposition où le montant est reçu. Au lieu d'obtenir le remboursement selon les termes du Régime, le Vendeur a choisi de céder ses droits à l'Acheteur en contrepartie d'un paiement de XXXXXXXXXX $. Nous sommes d'opinion que ce paiement est un substitut raisonnable à la prestation de retraite ou de pension qu'il aurait pu recevoir directement du Régime. Par conséquent, en vertu du sous-alinéa 56(1)a)(i), ce montant doit être ajouté au revenu du Vendeur pour l'année d'imposition où il lui est versé.

20. En terminant, il faut se demander si les versions anglaise et française de la Loi donnent le même résultat. À cet égard, la cour, dans la décision Transocean Offshore Ltd.² , a conclu que l'expression française "au titre de" était au moins aussi large que l'expression anglaise correspondante. Pour en arriver à cette conclusion, elle a considéré que la version française utilise parfois l'expression "au titre de" alors que la version anglaise emploie l'expression "in respect of". En se référant à la décision Nowegijick v. the Queen³ , la cour a rappelé que l'expression "in respect of" devait être interprétée de façon large. À cet égard, le passage pertinent de la décision Transocean Offshore Ltd. se lit comme suit:

[53] Counsel for Transocean argues that the French version of paragraph 212(1)(d) of the Income Tax Act is narrower than the English version, because the French phrase "au titre" means "as", and does not mean "instead of". Counsel for the Crown answers this argument by explaining, with numerous references to the legislative history of the French version of the Income Tax Act, that the French phrase "au titre" is used in the French version of the Income Tax Act to mean "in respect of". The phrase "in respect of" has been described as "the widest of any expression intended to convey some connection between related subject matters": Nowegijick v. The Queen, [83 DTC 5041] [1983] 1 S.C.R. 29, per Dickson, J., writing for the Court at page 39.

[54] The French version of the statutory provision considered in Nowegijick was not "au titre", it was "quant à". However, the Nowegijick definition of the phrase "in respect of" was applied in The Queen v. Savage, [83 DTC 5409] [1983] 2 S.C.R. 428, in which the statutory provision in issue used the phrase "in respect of" in the English version and "au titre" in the French version. The case involved an employee of a life insurance company who received from her employer $300 as a result of passing certain examinations she had taken, voluntarily and on her own time, to improve her understanding of the life insurance business. There was a dispute as to whether the $300 was taxable as income from employment on the basis that it was, in the words of what was then paragraph 6(1)(a) of the Income Tax Act, R.S. 1970-71-72, c. 63, a benefit or advantage (emphasis added):

[...] in respect of, in the course of, or by virtue of an office or employment.

[...] au titre, dans l'occupation ou en vertue de la charge ou de l'emploi.

[55] Dickson, J., writing for the majority, held that the payment fell within this provision. (He went on to conclude that the payment was exempt from tax because it also came within the scope of a more specific provision, paragraph 56(1)(n) of the Income Tax Act, which taxed certain awards, but only over $500.).

[56] Given the manner in which the French phrase "au titre"is typically used in the French version of the Income Tax Act, the Crown has the better side of this debate. I conclude that the French version of paragraph 212(1)(d) of the Income Tax Act is at least as broad as the English version.

Concernant l'application du sous-alinéa 56(1)a)(i) à la somme de XXXXXXXXXX $, nous sommes d'opinion que les versions anglaise et française de la Loi donnent le même résultat.

Conclusion

21. À notre avis, le montant de XXXXXXXXXX $ n'est pas une prestation de retraite ou de pension mais doit tout de même être ajouté au revenu du Vendeur, pour l'année d'imposition où il est reçu, en vertu du sous-alinéa 56(1)a)(i) puisqu'il constitue un substitut raisonnable versé au titre d'une prestation de retraite ou de pension.

22. L'approche que nous avons utilisée dans ce dossier est la même que celle que la Cour canadienne de l'impôt a préconisée dans la décision Michael Holzhey c. Sa Majesté la Reine⁴ qui portait sur l'application de l'alinéa 12(1)c).

Accès à l'information

23. À titre de renseignement, une copie de cette note de service sera dépersonnalisée selon les critères de la Loi sur l'accès à l'information et elle sera mise dans la bibliothèque électronique de l'Agence du revenu du Canada. De plus, une copie dépersonnalisée sera distribuée aux éditeurs fiscaux commerciaux pour qu'ils l'incluent dans leurs bases de données. Le processus de dépersonnalisation enlèvera tout ce qui ne doit pas être divulgué, y compris les renseignements qui peuvent révéler l'identité du contribuable. Si votre client demande une copie de cette note de service, il est possible de lui fournir la version de la bibliothèque électronique. Le client peut aussi demander une copie dépersonnalisée selon les critères de la Loi sur la protection des renseignements personnels, qui n'enlève pas l'identité du client. Vous devriez adresser toute demande pour cette dernière version à Madame Jackie Page, au (819) 994-2898. Une copie à remettre au client vous sera envoyée.

Nous espérons que ces commentaires vous seront utiles.

Gestionnaire de la section du secteur
financier et des entités exonérées
Direction des décisions en impôt
Direction générale de la politique
législative et des affaires réglementaires

ENDNOTES

¹ CAF, 2005 DTC 5201, par. 47 et 60
² id. par. 53 à 56
³ 83 DTC 5041; 1 R.C.S. 29
⁴ 2007 CCI 247

Summaries

Summary Under

Tax Topics - Income Tax Act - Section 56 - Subsection 56(1) - Paragraph 56(1)(a) - Subparagraph 56(1)(a)(i)

amount of asset sale price allocated to actuarial surplus was includible under s. 56(1)(a)(i) as being in lieu of refund of such surplus

Before concluding that the portion of the sale price allocated on the sale of a business division to the actuarial surplus in the pension plan was to be included in the vendor’s income under s. 56(1)(a)(i), the Directorate quoted from Transocean regarding the meaning of “in lieu of payment of”, indicated that this established a test of whether the amount was a "reasonable substitute for a superannuation or pension benefit," and concluded:

Instead of obtaining a refund under the terms of the Plan, the Vendor elected to assign its rights to the Purchaser in consideration for a payment of $XXXXXXXXXX. We are of the view that such payment is a reasonable substitute for the superannuation or pension benefit that it could have received directly from the Plan. Consequently, by virtue of subparagraph 56(1)(a)(i), that amount must be included in the Vendor's income for the taxation year in which it is paid to it.

Words and Phrases

in lieu of

You are here

14 February 2008 Internal T.I. 2007-0256401I7 F - Vente d'un surplus actuariel

View modes

Translation disclaimer

Names of the parties

The Facts

Your Opinion

Vendor’s Opinion

Your Question

Our Opinion

Nom des parties

Les faits

Votre opinion

Opinion du Vendeur

Votre question

Notre opinion

Conclusion

Accès à l'information