| 24(1) | 5-902452 |
| N. Goldstein | |
| (613) 952-9853 |
19(1)
November 28, 1990
Dear Sirs:
Re: Subsection 60(j.1) of the Income Tax Act (the "Act")
This is in reply to your letter of September 10, 1990, in which you requested an interpretation of subsection 60(j.1) of the Act as it applies to the specific fact situation outlined in your letter.
As noted in Information Circular 70-6R2, we do not give opinions in respect of specific situations except on a rulings basis. Determination of the tax consequences of a specific fact situation is generally the responsibility of the taxpayer's local District Office. Although we are unable to provide an opinion or the specific scenario included in your request, we are able to provide the following general comments.
The amount determined for purposes of subparagraph 60(j.1)(i)(A) of the Act is $2,000 times the number of years that the employee or former employee was employed by an employer or a person related to the employer. Paragraph 60(j.1)(iv) extends the meaning of "person related to the employer" to include "any person whose business was acquired or continued by the employer". Thus, if company A acquires or continues the businesses of company B and company C subsequently acquires or continues the business of company A, it would be our opinion that company A, company B and company C would all be related to each other under the extended definition of "related person" in paragraph 60(j.1)(iv) of the Act. Consequently, the employee would be considered to have been an employee or former employee of each of company A, company B and company C for the purposes of subsection 60(j.1) of the Act.
While we hope our comments are of assistance to you they do not constitute an advance income tax ruling and therefore are not ruling on the Department in respect of a specific situation.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate