31 January 1991 Income Tax Severed Letter

5-910210
                                             D.S. Delorey
                                             (613) 957-3494

               19(1)

January 31, 1991

Dear Sirs:

This is in reply to your letter of January 11, 1991 concerning a death benefit payable under the Canada Pension Plan ("CPP") Act.

The Tax Review Board case to which you refer in your letter; i.e., Cumming v. MNR (76 DTC 1029), was subsequently heard by the Federal Court-Trial Division (76 DTC 6265). The Federal Court confirmed the Tax Review Board's decision that the death benefit payable under the CPP Act was not a death benefit for the purposes of the Income Tax Act. That decision is reflected in paragraph 3(c) of Interpretation Bulletin IT-301 . However, the Federal Court went on to state that the CPP death benefit was nevertheless a benefit under the CPP and was therefore required to be included in income by virtue of clause 56(1)(a)(i)(B) of the Income Tax Act.

Accordingly, a CPP death benefit is required to be included in income and, normally, it would be included in the income of the deceased's estate.

We trust that our comments are of assistance.

Yours truly,

for Director Financial Industries Division Rulings Directorate

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