November 14, 1989
| Mr. R.A. Short | ||
| General Director | BY HAND | |
| Tax Policy and Legislation Branch | ||
| Department of Finance | N.M. Sheerin | |
| 140 O'Connor Street | 957-2079 | |
| L'Esplanade Laurier | I-3331 | |
| 16th Floor, East Tower | ||
| Ottawa, Ontario K1A 0G5 |
Dear Al:
Re: Employee Benefit Plan for Professional Athletes
Enclosed is a copy of a memorandum we received from our Rulings Directorate concerning the above noted subject.
For a number of years Revenue issued favourable advance rulings on employee benefit plans deferred payment options provided that the deferral period (or the guaranteed tern in the case of plans funded by the purchase of a life annuity) did not exceed 15 years. Recently, Rulings have dropped this restriction on the length of the deferral period, since there is nothing in the Income Tax Act to support it.
We would appreciate it if you would advise us whether you have any policy concerns that professional athletes can structure employee benefit plans that result in unduly long tax deferrals.
Yours sincerely,
B.J. BrysonActing Director Current Amendments andRegulations Division
Enclosure
NMS/jab