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 Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues: A taxpayer is an XXXXXXXXXX ; however, he does not accept employment income from his church. Can such a taxpayer claim the clergyman's residence deduction?
Position: No
Reasons: Pursuant to the requirements of paragraph 8(1)(c) of the Act, a taxpayer cannot claim the clergyman's residence deduction if the value of the residence occupied by him or the rent paid by him for a residence he rented and occupied, or the fair rental value of a residence owned or occupied by him, for the year, is not included in his income from employment as a member or minister in charge of or ministering to a diocese, parish or congregation or engaged in such administrative service, as described in subparagraphs 8(1)(c)(i) and (ii) of the Act.
XXXXXXXXXX 2000-001065
G. Moore
March 17, 2000
Dear XXXXXXXXXX:
We are replying to your letter of February 24, 2000, regarding the clergyman's residence deduction.
As we understand it, you are an XXXXXXXXXX; however, since you receive a pension and Canada Pension Plan benefits, you do not accept employment income from your church. You indicate that you use your residence for the purposes of fulfilling your responsibilities as co-pastor of the church and you are asking if you can claim the clergyman's residence deduction for the 1999 taxation year.
Where an employer provides an employee with free accommodation, the value of the benefit is generally included in the employee's income. Similarly, if an employer provides an employee with an allowance in respect of accommodation, the housing allowance is also generally included in income. However, if an employee qualifies for the clergyman's residence deduction provided under paragraph 8(1)(c) of the Income Tax Act (the "Act"), he or she may claim a deduction in respect of the accommodation.
Generally, to be eligible for the clergyman's residence deduction, an individual must be a member of the clergy, a member of a religious order, or a regular minister of a religious denomination. When one of these conditions is met, the individual must be in charge of, or ministering to, a diocese, parish or congregation, or engaged exclusively in full-time administrative service by appointment of a religious order or religious denomination. The deduction provided for under paragraph 8(1)(c) of the Act corresponds to the value of the employment benefit included in the individual's income, where the employer provides the individual's residence. However, subject to certain limits, as explained below, where the individual rents the residence, the clergyman's residence deduction corresponds to the rent paid and, where the individual owns the residence, to the fair rental value of the residence.
In particular, subject to meeting all of the other requirements set out in paragraph 8(1)(c) of the Act ( hereafter referred to as the "qualifying employment"), an individual may claim an amount equal to the value of the residence occupied by an individual in the course of the qualifying employment to the extent that the value is included in computing the individual's income for the year pursuant to section 6 of the Act. Alternatively, the individual can claim the rent he or she paid for a residence rented or occupied by the individual or the fair rental value of a residence owned and occupied by the individual during the year but not exceeding the individual's remuneration from the qualifying employment. As it appears that you were not in receipt of remuneration from qualifying employment, you are not entitled to the clergyman's residence deduction for the 1999 taxation year.
We regret that our response could not be more favourable. An amendment to the Act would be required before the Canada Customs and Revenue Agency could allow a deduction under paragraph 8(1)(c) with respect to retired clergy who are not in receipt of remuneration from the qualifying employment. The Department of Finance is responsible for amendments to the Act.
Yours truly,
J. Wilson
for Director
Business and Publications Division
Income Tax Rulings Directorate
Policy and Legislation Branch
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