| 24(1) | 5-902297 |
| M.P. Baldwin | |
| (613) 957-3499 |
Attention 19(1)
October 9, 1990
Dear Sir:
Re: Retiring Allowances
We are replying to your letter of August 23, 1990 requesting a technical interpretation on subparagraph 56(1)(a)(ii), subsection 60(j.1), subsection 248(1) "Retiring Allowance".
As stated in the Department's position on question #50 of the Revenue Canada Round Table at the 1989 Canadian Tax Foundation Conference, "the Department does not consider an employee to have retired where he continues employment with any person who acquired or continues the business carried on by the employee's former employer".
Accordingly, any payments made by the vendor to employees in recognition of the employees' long service or the termination of their particular employer-employee relationship would not be a retiring allowance as there has been no retirement or loss of an office or employment of the employee. If the employee subsequently received a retiring allowance on his retirement or loss of an office or employment from the purchaser, the years of employment with the vendor company would be included in determining the eligible amount of retiring allowance.
We trust the above comments will be of assistance to you.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate