| 24(1) | 903247 |
| Maureen Shea-DesRosierss | |
| (613) 957-8953 |
19(1)
December 14, 1990
Dear Sirs:
Re: Employee Benefit Plan (EBP) for professional athletes
This is in reply to your letter of September 7, 1990 addressed to the Hamilton District Office which was referred to us for reply.
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.
Deferred compensation arrangements for professional athletes who participate in a league having regularly scheduled games are exempt from the retirement compensation arrangement and salary deferral arrangement provisions of the Income Tax Act. In the case of a Canadian team, the custodian of a plan must be a trustee who carries on business in Canada. Such plans are treated as EBPs under the Income Tax Act.
There are, at present, no restrictions in the Income Tax Act on the form in which benefits can be paid to the beneficiary of an EBP, or on the timing or duration of the benefit payments.
We trust the above comments will be of assistance to you.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate