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.
CGA ASSOCIATION ROUND TABLE
NORTHERN RESIDENTS DEDUCTIONS
QUESTION 8
The condition of "lived in this area for a period of at least six continuous months" seems to be very restrictive to individuals who work at remote sites for more than six months and who return to their regular residence on timed interval weekends, within this period, thus breaking the continuous residency test. The residency test should be changed so as to apply if the net days away from their regular residence is at least 180 days throughout the year.
DEPARTMENT'S POSITION
The deduction in 110.7 of the ITA is intended for individuals who reside in a prescribed area for not less than six months. The implication of the relatively short six month test is that there is not the requirement for permanence in the established residency.
The residency throughout the qualifying period must be continuous. There are individuals who reside in a prescribed area on a permanent basis, i.e., "in the settled routine" of their lives, that is where they "regularly or customarily" reside, and there area those individuals who reside in prescribed area on a temporary (although at least six months) basis who may maintain another residence in a non-prescribed area where they or their families "regularly or customarily" reside. It is our view that for those individuals in the former category a temporary absence (where the individual intends and ultimately does return to his "customary" residence) will not break the continuity of his residence. For those individuals in the latter category whose temporary absences consist of returning regularly to their other permanent residence each such absence is considered to be a break in the continuity of his residency in the prescribed area.
In order to change the residency test so as to apply if the net days away from their regular residence is at least 180 days throughout the year would require an amendment to the Income Tax Act and, as such, you may wish to direct your concerns to the Department of Finance.
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 1989
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 1989
Email this Content