Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CCRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.
Principal Issues:
1. What is the CCA class of a motor home?
2. Is the taxable benefit on the personal use of a motor home by an employee determined under paragraph 6(1)(a) or subsection 6(1)(e)?
Position TAKEN:
1. Class 10
2. Paragraph 6(1)(a)
Reasons:
1. A motor home is automotive equipment included in paragraph (a) of Class 10. However, it is not an automobile as defined in subsection 248(1) of the Act.
2. Paragraph 23 of IT-63R5
XXXXXXXXXX T. Young, CA
2003-004552
December 23, 2003
Dear XXXXXXXXXX:
Re: Motor Home
We are writing in response to your letter of October 25, 2003, concerning the income tax implications of purchasing a motor home. We also acknowledge our conversation of December 23 (Young/XXXXXXXXXX). Your client, a Canadian-controlled private corporation, is considering purchasing a motor home for use in its business. You asked us what is the appropriate capital cost allowance ("CCA") class for the vehicle and how the taxable benefit should be calculated for any personal use by the company's employees.
Written confirmation of the tax implications inherent in particular transactions is given by this Directorate only where the transactions are proposed and are the subject matter of an advance ruling request submitted in the manner set out in Information Circular 70-6R5, Advance Income Tax Rulings, dated May 17, 2002. However, we are prepared to provide the following comments, which may be of assistance to you.
As stated in paragraph 23 of interpretation bulletin IT-63R5, Benefits, Including Standby Charge for an Automobile, from the Personal Use of a Motor Vehicle Supplied by an Employer - after 1992, it is our general view that a motor home is a motor vehicle, but is not an "automobile" as defined in subsection 248(1) of the Income Tax Act (the "Act"). Therefore, a motor home would generally be included as automotive equipment in paragraph (a) of Class 10 of Schedule II of the Income Tax Regulations.
Further, in calculating an employee's income from employment, there is no standby charge pursuant to paragraph 6(1)(e) and subsection 6(2) of the Act for the availability of a motor home. However, a benefit must be added to income under paragraph 6(1)(a) for the personal use of a motor home. For more information on the calculation of the benefit under paragraph 6(1)(a), refer to paragraph 23 of the interpretation bulletin.
The documents referred to above may be found on our web site at www.ccra.gc.ca. We trust our comments will be of assistance to you.
Yours truly,
John Oulton, CA
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Policy and Legislation Branch
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