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.
MINISTER/DM'S OFFICE 93-4606T ADM'S OFFICE RETURN TO RULINGS, ROOM 303, MET. BLDG.
XXXXXXXXXX
Dear XXXXXXXXXX
I am responding to your letter of July 23, 1993, written on behalf of your constituent, XXXXXXXXXX concerning whether an allowance he received is exempt from taxation.
The confidentiality provisions of the Income Tax Act do not allow me to discuss the tax affairs of a particular individual without written authorization. However, I am providing you with the following general comments which I hope will be of assistance to you.
Under subsection 81(3) of the Income Tax Act, an officer of a municipal utilities board, commission or corporation or any other similar body is, within certain limits, entitled to exclude from his income an expense allowance received from such a body that employs the official. However, for this exemption to apply, the officer must be elected by popular vote. Accordingly, if an officer were to be appointed to such a body, the exemption would not apply and the full amount of the expense allowance paid to the officer would be subject to tax as employment income.
This issue was brought before the Tax Appeal Board in Morand v. M.N.R. 66 DTC 220 in which it was held that an individual, who was appointed as a councillor and selected for the office of mayor by councillors, was not entitled to exclude an expense allowance from income as he was not elected by popular vote.
I trust that the information I have provided will enable you to respond to XXXXXXXXXX
Yours sincerely,
Garth Turner
August 24, 1993
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© Her Majesty the Queen in Right of Canada, 1993
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© Sa Majesté la Reine du Chef du Canada, 1993
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