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.
Dear Sir:
Re: Accumulated Vacation Leave Whether considered Retiring Allowance
This is in reply to your letter of November 20, 1990 concerning the above-mentioned subject.
As indicated in Information Circular 70-6R2, we do not express opinions on specific proposed transactions other than as a reply to an advance income tax ruling. As a consequence thereof, we may only offer the following general comments.
When an employee terminates employment and a payment is made in respect of accumulated vacation leave not taken prior to retirement, the payment of said credits is considered to be ordinary remuneration and is included in the employee's income in the year of receipt pursuant to subsection 6(3) of the Income Tax Act as stated in paragraph 5 of Interpretation Bulletin IT-337R2. Since such a payment does not qualify as a "retiring allowance" as defined in subsection 248(1) of the Income Tax Act, it cannot be rolled over into a Registered Retirement Savings Plan.
The above comments are an expression of opinion only and, as indicated in Information Circular 70-6R2, they are not binding upon the Department. We trust however that they will be of assistance to you.
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
© Her Majesty the Queen in Right of Canada, 1991
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.
© Sa Majesté la Reine du Chef du Canada, 1991
Email this Content