Canada Revenue Agency Provides Comments on Taxation of Settlement Payments

In 2014-0522921E5, the CRA provides general comments on taxation of settlement payments. The CRA’s position is that whether a settlement payment is taxable is a question of fact based on the nature and purpose of the settlement payment and what the settlement was intended to replace.

2014-0522921E5 gives specific examples of treatment of settlements as ordinary income, settlements as payments for personal injury and settlements that constitute a windfall.

Prepared by: Shawn Tryon

Shawn is a partner practicing in the firm’s Vancouver office. Shawn practices in many areas of tax law including estate planning, corporate reorganizations, business structuring, tax planning for individuals and tax litigation matters. Prior to joining Thorsteinssons, Shawn gained extensive… more »