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: Whether compensation received as restitution for family property confiscated in 1955 by a foreign government is taxable.
Position: Not taxable.
Reasons: Windfall.
XXXXXXXXXX 980431
A. M. Brake
May 25, 1998
Dear XXXXXXXXXX:
Re: Settlement From Foreign Government
This is in reply to your letter of February 11, 1998, to our Calgary Tax Services Office which has been referred for our reply, requesting our view on the tax treatment of a proposed compensation payment which you anticipate receiving from a foreign government as restitution for family property confiscated by that government around the year XXXXXXXXXX. It is your understanding that the government involved has committed to making partial restitution and in this regard you have requested from them a cash payment of $XXXXXXXXXX in U.S. funds. You have been a resident of Canada since XXXXXXXXXX.
It is our view that the receipt of this money by you as compensation for the confiscated property would be considered a windfall and, therefore, not taxable under the Income Tax Act.
The foregoing comments represent our general views with respect to the subject matter of your letter. As indicated in paragraph 22 of Information Circular 70-6R3, dated December 30, 1996, this is not an advance tax ruling and is therefore not binding on Revenue Canada.
We trust our comments will be of assistance to you.
Yours truly,
Jim Wilson
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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