| 19(1) | 5-902000 |
| M.P. Baldwin | |
| (613) 957-3499 |
19(1)
November 9, 1990
Dear Sir:
Re: Deferred Income Plan 19(1)
This is in reply to your letter of July 24, 1990 in which you requested an opinion on the status of your Self-Funded Sabbatical Leave Plan with the 24(1). As your enquiry is in respect of a completed transaction you will have to contact your local district taxation office to determine what the tax consequences are of the deferral of taking your leave until September 1991. However, we are prepared to offer the following general comments.
Pursuant to paragraph 6801(b) of the Income Tax Regulations, where the main purpose of a self funded leave plan entered into before July 28, 1986 and not materially revised since that date is to provide a means for the employee to fund a leave of absence from employment and the deferrals under the plan commenced before 1987, amounts deferred under the plan will not be subject to the salary deferral arrangement rules contained in subsection 248(1) of the Income Tax Act. Accordingly, such deferred amounts need not be included in income of the employee until such time as they are received when the employee takes his leave of absence.
We trust the above comments will be of assistance to you.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate