| 19(1) | File No. 5-9756 |
| A.B. Adler | |
| (613)957-8962 |
April 19, 1990
Dear Sirs:
This is in reply to your letter dated March 13, 1990 in which you requested our views whether certain payments from an insurance company to a registered pension plan ("RPP") would constitute contributions thereto for purposes of paragraph 8(1)(m) of the Income Tax Act ("Act") in the following situation.
24(1)
It is not our practice generally to provide written opinions concerning actual and/or completed transactions, however, we are prepared to provide you with the following comments.
In order for the payments by the insurance company to the RPP to qualify as deductions under paragraph 8(1)(m) of the Act such payments must be in respect of a period of disability leave that qualifies as a period of eligible service under the RPP (refer to 8(e)(iv) of our Information Circular No. 72-13R8), and the individual involved must have a legal obligation thereunder to make contributions to the RPP for the period in question. Further, the indirect payment by a third party to the RPP in respect of benefits owing to the individual, in itself, would not preclude him from claiming a deduction under paragraph 8(1)(m) of the Act.
You are also concerned that since the LTD payments are tax free there could be little, if any, income from which the individual could deduct any paragraph 8(1)(m) contributions. For your information a loss from employment is included in the definition of a non-capital loss in paragraph 111(8)(b) of the Act and may qualify for a deduction in computing the individual's income for another year (or years) under the loss application rule in paragraph 111(1)(a) of the Act.
We trust that our comments will be of assistance to you.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate