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: Determination of provincial residence.
Position: Not enough information to make determination. Also, this deals with past taxation years and should be handled by the TSO.
Reasons: n/a
XXXXXXXXXX 2002-013572
Eliza Erskine
July 5, 2002
Dear XXXXXXXXXX:
Re: Provincial Residence Determination for XXXXXXXXXX
This is in reply to your letter to the Canada Customs and Revenue Agency's (the CCRA's) Winnipeg, Manitoba office of April 2, 2002, requesting an opinion on the provincial residence status of your clients XXXXXXXXXX, for provincial tax purposes. Your letter was forwarded to our Directorate because you said that you might need a "ruling". We also acknowledge our telephone conversation with you of April 23, 2002 (Erskine/XXXXXXXXXX), in which you requested that we provide you with a written response to your inquiry setting out what resources were available to you for making provincial residence status determinations. In that conversation you confirmed your understanding that you would not be receiving an advance income tax ruling from us.
We understand from your letter that you have advised your clients that although XXXXXXXXXX is employed in XXXXXXXXXX, and lives there with his wife while so employed, he is actually a resident of XXXXXXXXXX for provincial tax purposes due to the number and strength of his ties to XXXXXXXXXX and his wife have requested that you obtain confirmation from the CCRA that they are in fact resident in XXXXXXXXXX and not in XXXXXXXXXX.
The circumstances outlined in your letter relate to a specific, past fact situation. We note that written confirmation of the tax implications arising out of a particular fact situation are given by this Directorate only where the circumstances or events are proposed and are the subject matter of an advance income tax ruling request. For information regarding applying for an advance income tax ruling, please refer to our Information Circular 70-6R4, Advance Income Tax Rulings, which can be obtained from your local Tax Services Office or from our website at www.ccra-adrc.gc.ca . Income tax ruling requests are subject to an hourly fee and are handled by our Directorate on a priority basis.
As your letter refers to an actual, past fact situation, you will have to obtain confirmation of your client's provincial tax status from your local Taxation Services Office. However, we can offer the following general comments.
Generally, the CCRA considers the factual criteria set out in paragraphs 4 to 9 of Interpretation Bulletin IT-221R3, Determination of an Individual's Residence Status ("IT-221R3") to determine residence status for both federal and provincial tax purposes, although the bulletin was written specifically to address issues relating to determining residence status for federal income tax purposes. At the present time, there are no specific written guidelines published by the CCRA on how to determine residence status for provincial income tax purposes, however, IT-221R3 will be amended shortly to clarify this issue, and extra comments on determining provincial residence are being added to the T1 Guide. We expect that both of these amendments will be in place by the end of the year. As a matter of practice, the CCRA has applied the criteria set out in IT-221R3 to determinations of provincial residence status for many years.
An individual's primary residential ties - ties that will be considered to be significant for the purpose of determining residence status except in very rare cases - are his or her home, spouse or common-law partner, and dependants. Other residential ties, such as the location of financial accounts, are generally less important than the primary ties, and usually will only be significant when taken together with other residential ties. The CCRA considers that an individual's ongoing employment with a particular employer will generally be a significant residential tie, although such employment will not by itself result in an individual being determined to be resident in Canada or in a particular province in Canada. The CCRA considers that for the purposes of determining provincial residence status, the location of the individual's provincial health care benefits will usually be a significant residential tie to a particular province. Other residential ties, such as a provincial driver's license and vehicle registration, may be significant, but will not be as important in determining provincial residence status as the location of provincial health care benefits.
Although we cannot give you a final determination of your clients' provincial residence status in this letter, both because such a determination is outside our mandate in this particular instance and because we have not been provided with enough facts on which to base a residence determination, it appears to us from your letter that your clients may have been dual provincial residents, that is, residents of both XXXXXXXXXX. Regulation 2607 of the Income Tax Regulations states that where an individual was resident in more than one province on the last day of the taxation year, he or she is deemed to have resided on that day only in that province which may reasonably be regarded as his or her principal place of residence.
As it appears from your letter that your clients regularly resided together at a home in XXXXXXXXXX (regardless of whether it was rented or owned), on account of XXXXXXXXXX job in XXXXXXXXXX, and assuming that your clients were (or would have been, in the case of the XXXXXXXXXX taxation year) in XXXXXXXXXX only for the holiday season, it is our view that your clients' principal place of residence on XXXXXXXXXX was more likely XXXXXXXXXX than XXXXXXXXXX. We reiterate, however, that we do not have enough facts to provide you with a conclusive determination.
We trust that our comments will be of assistance to you. If you have further interpretative issues regarding residence status determinations, or if you have comments or questions with respect to IT-221R3, please write to the International & Trusts Division of this Directorate. Questions regarding administrative procedures, as well as requests for non-binding provincial residence status determinations for your clients, should be directed to your local Tax Services Office. If you request assistance from your local Tax Services Office in determining your clients' provincial residence status, we recommend that you provide them with detailed information regarding your clients' residential ties to both XXXXXXXXXX (having regard to the criteria listed in IT-221R3), as well as a statement setting out how much time was spent by each of your clients in each province during the relevant taxation years.
Yours truly,
Jim Wilson
for Director
International and Trusts Division
Income Tax Rulings Directorate
Policy and Legislation Branch
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