| Supply and Services | 922.082 |
| Canada | |
| Superannuation Branch | 901698 |
| P.O. Box 5010 | W.C. Harding |
| Moncton, N.B. | (613) 957-8953 |
| E1C 8Z5 |
Attention: Paul GareauChief (Reciprocal Transfer Agreements)Advisory Services Group
October 3, 1990
Dear Sirs:
Re: 19(1) Payments under Crown Liability Act
This is in reply to your letter of July 25, 1990 in respect of the above-noted taxpayer. The particulars of your situation are as described below.
Facts
24(1)
24(1)
On the basis of these facts you have asked:
1. Is the liability payment taxable?
2. Is it eligible for a direct "roll-over" to an RRSP in the same tax sheltered manner as a pension fund transfer or return of pension contributions?
Our opinion
As discussed by phone on September 27 (Morrissey, Harding), it is our opinion that the payment being considered is arguably a "retiring allowance" as defined in subsection 248(1) of the Income Tax Act (the "Act"). That definition reads:
"Retiring allowance". - "retiring allowance" means an amount (other than a superannuation or pension benefit or an amount received as a consequence of the death of an employee) received
(a) upon or after retirement of a taxpayer from an office or employment in recognition of his long service, or
(b) in respect of a loss of an office or employment of a taxpayer, whether or not received as, on account or in lieu of payment of, damages or pursuant to an order or judgment of a competent tribunal.
by the taxpayer or, after his death, by a dependant or a relation of the taxpayer or by the legal representative of the taxpayer";
Retiring allowances are further discussed in the Department's Interpretation Bulletin IT-337R2, a copy of which in enclosed 24(1) Accordingly the payment will be an amount paid in respect of 19(1) retirement or loss of employment and in recognition prior service and will, accordingly, be a retiring allowance.
As discussed in IT-337R2, retiring allowances may be transferred to an RRSP within the limits contained in paragraph 60(j.1) of Act. Given 24(1) and assuming that be _________________ payments (retiring allowances) which were transferred to an RRSP under paragraph 60(j.1) of the Act, we would not expect that he will be able to transfer much, if any, of this payment to an RRSP because of the limitations contained in paragraph 60(j.1) of the Act. There are no other provisions in the Act which permit the transfer of a retiring allowance to an RRSP.
We trust these comments will be of assistance to you.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate