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. Deductibility of rent under paragraph 8(1)(h)?

Position:

1. Not deductible.

Reasons:

1. The taxpayer paid rent for personal living accommodations in XXXXXXXXXX , where he reported to work 99% of the time. In our view, the workplace in XXXXXXXXXX was the employer's place of business as it related to the taxpayer. He was not ordinarily required to carry on his employment duties away from his employer's place of business or in different places as required by subparagraph 8(1)(h)(i). Further, amounts paid for the apartment rental would not be "amounts expended by the taxpayer...for travelling in the course of the office or employment" as stipulated in the midamble in paragraph 8(1)(h).

			2002-016974
XXXXXXXXXX 	Allan Nelson
(613) 443-7253
November 27, 2002

Dear XXXXXXXXXX:

Re: Advance Income Tax Ruling Request

We are writing in reply to your letter to us dated October 15, 2002, wherein you asked for an advance income tax ruling concerning the deductibility of certain rental payments made by you. We also acknowledge our telephone conversations (XXXXXXXXXX/Nelson) on October 28 and November 21, 2002, during which you provided additional information and requested that we provide a technical interpretation instead of a ruling. Accordingly, your deposit will be returned to you under separate cover.

Background

XXXXXXXXXX

You have asked us whether you will be entitled to deduct from your income [as an expense under paragraph 8(1)(h) of the Income Tax Act (Canada) (the "Act")] the rental payments that you make for the apartment in XXXXXXXXXX.

Our Comments

As discussed during our November 21, 2002, telephone conversation, based on the facts provided, it is our opinion that paragraph 8(1)(h) of the Act will not entitle you to deduct the amount of the XXXXXXXXXX apartment rental payments in computing your taxable income for the following reasons:

1. For income tax purposes, XXXXXXXXXX would be your employer's place of business and approximately 99% of your time is spent working in XXXXXXXXXX. Therefore, it is our view, you were not ordinarily required to carry on your employment duties away from your employer's place of business or in different places, as is necessary in order to meet the requirements of subparagraph 8(1)(h)(i) of the Act; and

2. Since XXXXXXXXXX is your employer's place of business to which you regularly report to work, amounts paid for the XXXXXXXXXX apartment rental would be personal in nature and would not be "amounts expended by the taxpayer...for travelling in the course of the office or employment" as is required in order to meet the conditions stipulated in the midamble of paragraph 8(1)(h) of the Act.

We hope the above will be of assistance to you.

Yours truly,

Milled Azzi CA
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Policy and Legislation Branch

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