23 March 2001 External T.I. 2001-0075035 - PRINCIPAL RESIDENCE

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: Whether the taxpayer's employer is considered to be the "same employer" for purposes of ITA 54.1(1) after a change in name following an acquisition of another company

Position: No position taken. Referred to TSO

Reasons: Insufficient information

		March 23, 2001

	Calgary Tax Services Office	Headquarters
Mr. R. Corrigall 	S. Parnanzone
	Director-Taxation	Tel. (613)957-2133

		2001-007503

Principal Residence

We are forwarding the correspondence of March 15, 2001 from XXXXXXXXXX for your action and reply. It deals with the application of subsection 54.1(1) of the Income Tax Act (the "Act") in respect of his principal residence.

As discussed in Interpretation Bulleting IT-120R5, Principal Residence, while an election under subsection 45(2) ensures that a taxpayer's property continues to qualify as a principal residence for up to four taxation years, even if the housing unit is not ordinarily inhabited during those years by the taxpayer (or, generally speaking, the taxpayer's family), subsection 54.1(1) removes the four-year limitation period if the taxpayer does not ordinarily inhabit the property as consequence of employment relocation and if certain conditions are met. As stated in paragraph 27 of IT-120R5, one such condition is that the taxpayer resumes ordinary habitation of the housing unit during the term of employment by the same employer or before the end of the taxation year immediately following the taxation year in which such employment terminates. The bulletin goes on to indicate that two corporations that are members of the same corporate group, or are otherwise related, are not considered to be the same employer (see paragraph 27).

XXXXXXXXXX would like to know if subsection 54.1(1) of the Act continues to apply in his case. He indicates that his employer changed name XXXXXXXXXX following the acquisition of a Canadian company in XXXXXXXXXX. That is, XXXXXXXXXX would like to know if the CCRA will consider XXXXXXXXXX and XXXXXXXXXX to be the same employer for purposes of subsection 54.1(1) of the Act.

We have searched our database but have found no information on XXXXXXXXXX. We are referring this correspondence to you because XXXXXXXXXX enquiry concerns an actual situation. Also, it is possible that your office may have some information regarding the corporation(s) as a result of audit actions.

For your information a copy of this memorandum will be severed using the Access to Information Act criteria and placed in the Legislation Access Database (LAD) on the Canada Customs and Revenue Agency's mainframe computer. A severed copy will also be distributed to the commercial tax publishers for inclusion in their databases. The severing process will remove all material that is not subject to disclosure, including information that could disclose the identity of the taxpayer. Should your client request a copy of this memorandum, they can be provided with the LAD version, or they may request a copy severed using the Privacy Act criteria, which does not remove client identity. Requests for this latter version should be made by you to Mrs. Jackie Page at (613)994-2898. A copy will be sent to you for delivery to the client.

M. Azzi, CA
for Director
Business and Partnerships Division
Income Tax Rulings Directorate

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