5-910791
Dear Sirs:
Re: Deferred Salary Leave Plan (the "Plan") Section 6801 of the Income Tax Regulations (the "Regulations")
This is in reply to your letter of March 21, 1991 concerning the 24(1) proposed amended Plan.
We note that you have not inserted a provision for the annual payout to the employee of the accrued interest on the deferred amount. We refer you to our letter of February 26, 1991 at page 2 under the title Missing, A.3. Furthermore under the title Transfers/Promotions at page 4 of your amended Plan, it should be stipulated that in no event will a re-negotiated contract result in a commencement of the leave absence more than six years after salary deferrals commenced.
Provided that the amended Plan incorporates the provisions above- mentioned, it is our opinion that the amended Plan will be a prescribed plan under paragraph 6801(a) of the Regulations.
The above comments are an expression of opinion only and as indicated in Information Circular 70-6R2, they are not binding upon the Department. We trust however that they will be of assistance to you.
Yours truly,
for DirectorFinanCial Industries DivisionRulings Directorate