Revenue Canada Taxation Head Office
XXX
B. Fioravanti (613) 957-8962
October 27, 1987
Dear Sir:
Re: Deferred Salary Retirement Plan (the "Plan")
This is in reply to your letter of September 21 concerning the status of the Plan and our income tax ruling No. E-883 dated March 27, 1985 (the "Ruling").
In our opinion, the Plan is subject to the new "salary deferral arrangement" rules set out in subsection 248(1) of the Income Tax Act for all agreements entered into after February 26, 1986. For agreements entered into prior to February 26, 1986, the deferred amounts for services rendered up to July 1986 will be exempt from those rules and need not be included in the participants' income until the earliest of the dates referred to in ruling A of the Ruling.
All members of your Plan will be subject to the salary deferral arrangement rules for services rendered after June 26, 1986 because, pursuant to XXXX. Therefore, income deferred in respect of services rendered after June 26, 1986 will be required to be included in the participants' income in the year of deferral.
We trust that the above will be of assistance.
Yours truly,
for Director Financial Industries Division Rulings Directorate Legislative and Intergovernmental Affairs Branch