12 May 2006 External T.I. 2006-0168981E5 - Remote Work Location& Special Work Site Exclusions

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.

Principal Issues: Whether the exclusions under subsection 6(6) of the Act on employment at remote work location or special work site would apply to an employee who is able to move his or her principal place of residence, a houseboat, to a rented mooring site near the work location.

Position: The remote work location and the special work site exclusions would not apply to the employee in question.

Reasons: The remote work location exclusion would not apply to the employee in question because the employee would be establishing and maintaining a self-contained domestic establishment at the remote work location. The special work site exclusion would not apply to the employee in question because the employee would not be maintaining another self-contained domestic establishment as his or her principal place of residence at another location and furthermore, the employee's principal place of residence would be located at the special work site.

									D Tiu
XXXXXXXXXX 								(613) 957-8961
									2006-016898
May 12, 2006

XXXXXXXXXX:

Re: Remote Work Location and Special Work Site
Exclusions under Subsection 6(6) of the Income Tax Act ("the Act")

We are writing in response to your January 30, 2006 inquiry on the above subject and further to your subsequent telephone discussions with Dominic Tiu. You inquired whether the exclusions under subsection 6(6) of the Act on employment at remote work location or a special work site would apply to an employee who is able to move his or her principal place of residence, a houseboat, to a rented mooring site located near the work location.

Written confirmation of the tax consequences inherent in a particular transaction or series of transactions are given by this Directorate only where the transactions are proposed and are the subject matter of an advance ruling request submitted in the manner set out in Information Circular 70-6R5. In any event, a request cannot be considered for a ruling when the transactions are completed or where the issues involved are primarily questions of fact. Notwithstanding the foregoing, we are prepared to provide the following general comments.

Remote Work Locations

Subsection 6(6) of the Act allows the value of, or an allowance (not in excess of a reasonable amount) received in respect of expenses incurred by an employee for, board and lodging for a period at a remote work location to be excluded from employment income. For the remote work location exclusion to apply, all of the following requirements must be met:

(a) the employee must have worked at a remote work location, being a location at which, by virtue of its remoteness from any established community, the employee could not reasonably be expected to have established and maintained a self-contained domestic establishment; and

(b) the period while the employee was required by the employee's duties to be at the remote work location was at least 36 hours.

Special Work Sites

Subsection 6(6) also excludes from the income of an employee the value of, or an allowance (not in excess of a reasonable amount) received in respect of expenses incurred by the employee for, board and lodging for a period at a special work site. For the special work site exclusion to apply, all of the following requirements must be met:

(a) the employee must have worked at a special work site, being a location at which the duties performed by the employee were of a temporary nature;

(b) the employee maintained at another location a self-contained domestic establishment as the employee's principal place of residence

(i) that was, throughout the period, available for the employee's occupancy and not rented by the employee to any other person, and

(ii) to which, by reason of distance, the employee could not reasonably be expected to have returned daily from the special work site; and

(c) the period while the employee was required by his or her duties to be away from the employee's principal place of residence, or to be at the special work site, was at least 36 hours. The period of at least 36 hours may include time spent travelling between the employee's principal place of residence and a special work site.

Self-Contained Domestic Establishment

The term "self-contained domestic establishment" is defined in subsection 248(1) of the Act as a dwelling house, apartment or other similar place of residence where a person generally sleeps and eats. A residence is considered to be a self-contained domestic establishment if it is a living unit with restricted access that contains a kitchen, bathroom, and sleeping facilities. It is our understanding that the houseboat in question is the principal place of residence of the employee in question when moored in its home location. As such, it is our view that it would meet the definition of a self-contained domestic establishment.

It is therefore our opinion that the remote work location exclusion would not apply to the employee in question because the employee would be establishing and maintaining a self-contained domestic establishment at the remote work location. It is also our opinion that the special work site exclusion would not apply to the employee in question because the employee would not be maintaining another self-contained domestic establishment as his or her principal place or residence at another location and furthermore, the employee's principal place of residence would be located at the special work site.

We trust that the foregoing is satisfactory.

Yours truly,

Randy Hewlett
Section Manager
For Division Director
Business and Partnerships Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch