Citation: 2010TCC599
Date: 20101123
Docket: 2010-955(IT)I
BETWEEN:
ROBYNN VAN ZANT,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
V.A. Miller J.
[1]
The issue in this
appeal is whether the Appellant is entitled to deduct moving expenses in the
amount of $12,730 in 2007.
[2]
The Minister of
National Revenue (the “Minister”) reassessed the Appellant to disallow the
entire claim for moving expenses on the basis that she was only allowed to
claim expenses up to a maximum of fifteen days from the date of the move and as
this period could not be determined, the entire claim was disallowed.
[3]
The Appellant’s claim
for moving expenses included the following amounts:
|
Date
|
Item
|
Cost
|
|
August 2007
|
Cost of purchasing new Residence
|
$1,818.64
|
|
April 19 to September 22
|
Storage
|
5,406.00
|
|
April 26, 2007
|
Storage insurance
|
581.00
|
|
|
Self-storage and moving
|
1,002.73
|
|
February 14 to June 21, 2007
|
Costs incurred leading up to Initial Move
|
3,183.73
|
|
June 13, 2007 to
August 13, 2007
|
Initial Move from Red Deer
|
4,197.30
|
|
September 24, 2007 Trip #1
|
Cost to move household items
|
2,997.17
|
|
October 15, 2007 Trip #2
|
Cost to move household items
|
2,737.31
|
|
November 5, 2007 Trip#3
|
Cost to move household items
|
1,960.31
|
|
Total
|
|
$23,884.19
|
The Appellant claimed the amount of $12,730 as moving
expenses in her 2007 income tax return. It was her intention to claim the
balance of $11,154.19 in her 2008 income tax return.
[4]
In 2007, the Appellant
moved from Red Deer, Alberta to Portage La Prairie, Manitoba. In Red
Deer, she rented the premises
in which she lived. It was her evidence that the landlord applied to the Court
of Queen’s Bench of Alberta to have the residential tenancy between
them terminated as he wanted to sell the building. According to the Consent
Order, dated April 26, 2007, between the Appellant and her former landlord, the
Appellant was to vacate the residential premises by June 22, 2007.
[5]
The Appellant knew that
her landlord was attempting to evict her and she decided that she would move to
Manitoba to be close to her family. She was an
employee of Wal-Mart Canada and in June 2007, she transferred from the
Wal-Mart store in Red Deer, Alberta to that in Portage La Prairie, Manitoba. The Appellant was an hourly paid associate and as
such, she did not qualify to have her moving expenses paid by Wal-Mart.
[6]
It was the Appellant’s
evidence that she received quotes from two moving companies but she decided to
move her household items herself with the help of her friend, Larry Green. She
placed the majority of her household goods in storage in Red Deer. The Appellant left Red Deer on June 27, 2007. She was on vacation until she started to work in
Portage La Prairie on July 2 or 3. She drove to Portage La Prairie in a motor
home which she had purchased. Once there, she stayed in a campground while she
worked and looked for a residence to purchase. It was her evidence that she
lived in the motor home for 21 nights while she looked for a home. She moved
into her home on August 13 and then she moved her household goods out of
storage in Red Deer.
[7]
The Appellant incurred
the cost of three trips to move all of her possessions to Manitoba. On the first trip on September 24, Mr. Green was
with her. During the second and third trips on October 15 and November 5, Mr.
Green moved the rest of the Appellant’s goods.
[8]
The relevant provisions
of the Income Tax Act (the Act) are:
62. (1) Moving
expenses -- There may be deducted in computing a taxpayer's income for a
taxation year amounts paid by the taxpayer as or on account of moving expenses
incurred in respect of an eligible relocation,
…
(3) Definition of
"moving expenses" --
In subsection (1), "moving expenses" includes any expense incurred as
or on account of
(a) travel
costs (including a reasonable amount expended for meals and lodging), in the
course of moving the taxpayer and members of the taxpayer's household from the
old residence to the new residence,
(b) the cost to
the taxpayer of transporting or storing household effects in the course of
moving from the old residence to the new residence,
(c) the cost to
the taxpayer of meals and lodging near the old residence or the new residence
for the taxpayer and members of the taxpayer's household for a period not
exceeding 15 days,
(d) the cost to
the taxpayer of cancelling the lease by virtue of which the taxpayer was the
lessee of the old residence,
(e) the
taxpayer's selling costs in respect of the sale of the old residence,
(f) where the
old residence is sold by the taxpayer or the taxpayer's spouse or common-law
partner as a result of the move, the cost to the taxpayer of legal services in
respect of the purchase of the new residence and of any tax, fee or duty (other
than any goods and services tax or value-added tax) imposed on the transfer or
registration of title to the new residence,
(g) interest,
property taxes, insurance premiums and the cost of heating and utilities in
respect of the old residence, to the extent of the lesser of $5,000 and the
total of such expenses of the taxpayer for the period
(i)
throughout which the old residence is neither ordinarily occupied by the
taxpayer or by any other person who ordinarily resided with the taxpayer at the
old residence immediately before the move nor rented by the taxpayer to any
other person, and
(ii) in which
reasonable efforts are made to sell the old residence, and
(h) the cost of
revising legal documents to reflect the address of the taxpayer's new
residence, of replacing drivers' licenses and non-commercial vehicle permits
(excluding any cost for vehicle insurance) and of connecting or disconnecting
utilities,
but, for
greater certainty, does not include costs (other than costs referred to in
paragraph (f)) incurred by the taxpayer in respect of the acquisition of the
new residence.
248 “eligible relocation” means a relocation of a
taxpayer where
(a) the relocation occurs to enable the taxpayer
(i) to carry on a business or to be employed at a
location in Canada (in section 62 and this
subsection referred to as “the new work location”), or
(ii) to be a student in full-time attendance enrolled
in a program at a post-secondary level at a location of a university, college
or other educational institution (in section 62 and in this subsection referred
to as “the new work location”),
(b) both the residence at which the taxpayer
ordinarily resided before the relocation (in section 62 and this subsection referred
to as “the old residence”) and the residence at which the taxpayer ordinarily
resided after the relocation (in section 62 and this subsection referred to as
“the new residence”) are in Canada, and
(c) the distance between the old residence and
the new work location is not less than 40 kilometres greater than the distance
between the new residence and the new work location
except that, in applying subsections 6(19) to (23) and
section 62 in respect of a relocation of a taxpayer who is absent from but
resident in Canada, this definition shall be read without reference to the
words “in Canada” in subparagraph (a)(i), and without reference to
paragraph (b);
[9]
Because the word
“includes” is used in the definition of “moving expenses” in subsection 62(3), the
list of items in that definition is not exhaustive. However, the term “moving
expenses” does not include all of the expenses which the Appellant claimed.
Those expenses included, among others, the costs of the cartons and tapes she
used for packing her goods; expenses for storing her goods from the moment she
decided to move; costs of the lawyer who helped her with the eviction notice
from her landlord in Red Deer; costs of phone cards; costs of a table fan and
lights for her motor home in Portage La Prairie; liquor; and, the costs of
acquiring her new residence.
[10]
In Storrow v. R.,
[1979] F.C. 595 (FCTD), Collier J. opined that moving expenses were those
outlays incurred to effect the physical transfer of the taxpayer, his
household, and their belongings to the new residence[1]. Likewise, in Séguin
v. R., [1998] 2 C.T.C. 13
(FCA), at paragraph 8, the Court stated:
8 According
to the ordinary meaning of the words used, the provision includes those
expenses incurred for physically moving, changing one's residence, and certain
other expenses directly related to the actual move and resettlement, and not
some amount intended to compensate for accessory damages that are unrelated to
the actual move to and resettlement in the new residence.2 Thus, it
excludes the interest expenses on the old residence that do not pertain
directly to the physical move of the taxpayer and his family, but instead
pertain to the bank loan he took out on his old residence.
[11]
In Séguin the Federal Court of Appeal relied on the
decision of Addy J. in Gold v. R.[2]
where he said the following about subsection 62(3):
6 From
this subsection it seems abundantly clear that the words "moving
expenses" mean the expenses incurred in physically moving and in actually
changing residence and certain other very specific expenses relating directly
to the actual move and reinstallation and do not mean an amount to compensate
for incidental disturbances or damages not related to the actual move and
reinstallation in the new residence.
[12]
Prior to her move to Manitoba, the
Appellant did not own her own home. Consequently, paragraph 62(3)(f) of
the Act does not apply to the Appellant and she cannot deduct the costs
of acquiring her new residence in Manitoba.
[13]
The Appellant has included the
cost of storing her goods from April to September as a moving expense.
According to paragraph 62(3)(b), the Appellant is entitled to the cost
of storing her household effects in the course of moving from Alberta to Manitoba.
Storage costs incurred in April and May were not incurred in the course of the
Appellant’s move but were incurred in preparation for the move. I have
concluded that the cost of storage for June, July and August is reasonable in
the circumstances. This amount was $2,704.50. The Appellant is also entitled to
claim the cost of insurance for those months which was $290.50.
[14]
The Appellant stated that the
amount of $1,002.73 is duplicated in the amount of $3,183.73 which was the
expense incurred in preparation for the initial move. This amount included the
legal expenses incurred by the Appellant with respect to the eviction notice
she received from her landlord in Red
Deer. It also included the cost of
insuring the goods which she had in storage which I have already allowed. It
included the costs of gas, phone cards and other expenses that were incurred
prior to the actual move from Red Deer. These were not amounts incurred in physically
moving. I conclude that the amount of $3,183.73 is not a moving expense as that
term is defined in the Act.
[15]
The Appellant is entitled to claim
the expense of moving herself from Alberta to Manitoba. From the documents she
submitted, I have calculated this expense to be $679.51. It includes all meals
and accommodation expenses incurred from June 27 to July 2. This amount also
included the camp fee for 3 days at the campground in Manitoba. The
Appellant is also entitled to claim the expense of transporting her goods from Alberta to Manitoba. She
has submitted that it required three separate occasions to move all of her
belongings. Each of these trips required a stay in a motel while her goods were
packed into the trucks. With respect to the first and second trip, she claimed
an expense for three nights in a motel; and, for the third trip, she claimed an
expense for two nights in a motel. I have reviewed the receipts included in
exhibit A-2 and I have calculated that the expense of transporting the
Appellant’s goods from Alberta to Manitoba was $7,353.42. I have not allowed any amounts claimed
by the Appellant for which there was not a receipt. The cost of liquor is not a
moving expense and these amounts were not allowed.
[16]
In conclusion, the appeal is
allowed and the Appellant is entitled to deduct moving expenses in the amount
of $11,027.93.
Signed at Ottawa, Canada, this 23rd
day of November 2010.
“V.A. Miller”
Email this Content