2 July 1991 Administrative Letter 911446 F - Moving Expenses

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.

Re: Moving Expenses

Your letter of May 17, 1991, addressed to the Deputy Minister of Revenue Canada - Taxation, was referred to this Directorate for reply.  Your correspondence requests a statement addressing the deductibility of moving expenses incurred by instructors on a paid leave of absence to pursue studies at a university located in a city other than   24(1) 24(1)     You have asked that we indicate that a moving expense deduction is available to an individual when the following conditions are met:

1.     the move is necessary to obtain new expertise (and is why the leave is granted by the employer) and

2.     a salary continues to be received from   24(1)     while on leave status.

We are unable to provide you with the assurance you are seeking.  It is a question of fact whether any individual, in the above situation, is entitled to deduct moving expenses.

The reason for the move must be to carry on a business, be employed at a location in Canada or to be a student in full-time attendance at an education institution that is a university, college or other educational institution providing courses at a post-secondary school level.  Where the primary reason for the relocation is to pursue fulltime studies, and the pursuit of the studies is not a condition of employment, eligible moving expenses may be claimed only against award income such as scholarships, fellowships, research grants and similar awards and only if these awards are reported as income. This is true even where the student receives incidental employment income at the new location.  In the brief situation outlined by you, it is not entirely clear whether the reason for the move is to pursue full-time studies at a university or to continue employment at a new location wherein the duties of employment require attendance at an institution providing courses at a post-secondary school level in order to bring qualifications and academic proficiency to a level required by the employer. It is our view that such a determination can only be made on a case by case basis.

While the individual may, depending on circumstances, be considered to be employed at the new location, other facts must be considered.  A temporary transfer, where ties in the original residence are not severed (home not sold or rented or advertised for sale or rent, or the cancelling of a former lease for example), would preclude a deduction for a moving expense because the individual cannot be said to "ordinarily" reside in the new location.  The new residence must generally be a place that fulfills the same conditions of residence as the old residence.  The individual's intentions at the time of the transfer to return to the original location, duration of study at the new location and whether the move is required to satisfy a condition of employment are factors which indicate whether the individual changes residences or simply sojourns at the new location.

We trust our comments will be of assistance to you.

Yours truly,

for Director Business and General Division Legislative and Intergovernmental Affairs Branch