| File No. 903386 | |
| R.B. Day | |
| (613) 957-2136 | |
| March 29, 1991 |
Re: 24(1)
We are writing in reply to your letter of November 16, 1990. wherein you requested an advance income tax ruling on behalf of 24(1). We apologise for the delay in our reply.
24(1)
As discussed during our telephone conversation (Weil 19(1)) of March 25, 1991, we are unable to provide you with the advance ruling requested without complete details (including a copy of the trust agreement) regarding the operation of the Fund. We are, however, prepared to offer the following general comments.
Our Comments
From the information contained in your letter, it would appear that funds set aside by an employee would be taxable in the hands of the employee in the year the services were performed pursuant to subsections 5(1) and 56(2) of the Income Tax Act (the "Act").
Interest on the amounts in the Fund would be taxable in the hands of the employee pursuant to paragraph 12(1)(c) of the Act in the year paid or credited to the Fund.
Should you wish to provide us with more detailed information about the Fund along with all appropriate documentation, we would be prepared to offer specific comments at that time.
The $400 deposit will be returned under separate cover.
Yours truly,
for DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch