Nortel Networks Corporation, November 15, 2017
November 15, 2017
On Friday, November 10, 2017, the Tax Court of Canada released its decision in the Test Case Appeals.
In his decision, the Honourable Mr. Justice Sommerfeldt held the distributions from the HWT which replaced future payments under a group term life insurance policy for pensioners and disabled employees are not taxable under subsection 6(4) of the Income Tax Act and cannot otherwise be included under paragraph 6(1)(a).
The decision of the Tax Court, however, held that both Survivor Income Benefits (SIB) and Survivor Transition Benefits (STB) are taxable as payments in lieu of death benefits under section 56(1)(a)(iii) of the Income Tax Act.