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 Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues:
Where an employer has moved the work place to another location and certain employees who are within 2 years of retirement are provided with interim accomodation and travel allowance for the short time at the new work location, instead of being required to relocate, does subsection 6(6) apply?
Position TAKEN:
if the employees can satisfy the general guidelines related to the use of the term "temporary" as used in the phrase "duties performed ...were of a temporary nature" and there is factual certainty on this point at the outset then subsection 6(6) may indeed apply.
Reasons FOR POSITION TAKEN:
It appears that in all other respects the new location would qualify as a special work site. On the assumption the individuals only have a short term to retirement and mantain a principal place of residence near the old work location, then the subsection 6(6) exclusion criteria would appear to be met.
June 30, 1995
Toronto Tax Services HEADQUARTERS
Attention: G. Wright Sandra Short
471-5-1 (613) 957-8953
951108
Interim accommodation expenses and travel allowance
This is in reply to your enquiry of April 20, 1995 which asks that we provide our comments to question #4 of a March 10 memorandum received by you from XXXXXXXXXX. You have asked that we advise whether employees, who are within two years of qualifying for retirement benefits and who are provided with interim accommodation expenses and a set allowance to cover meals and travel rather than being required to relocate shortly before a scheduled retirement, are considered to be in receipt of a taxable benefit or whether such benefits will be exempted under the provisions of subsection 6(6) of the Act. We have assumed that the interim period referred to is the period between the time the employee is otherwise required to report to a new work location and retirement.
Our comments to assist you in responding to the enquiry relate primarily to the interpretation of the word "temporary" as found in subparagraph 6(6)(a)(i) of the Act. However, we would caution that a determination under subsection 6(6) of the Act must be made on a case by case basis and all other requirements of subsection 6(6) must otherwise be met.
The Department's interpretation of the word "temporary" in the circumstances is reflected in paragraph 9 of Interpretation Bulletin IT-91R3. The key to determining whether subsection 6(6) applies to the interim accommodation reimbursement and transportation and meal allowances provided by the employer is to consider the terms of employment at the special work site at its commencement. Where the terms of employment indicate that the period of employment at the special work site is anticipated to be two years or less, subsection 6(6) clearly applies.
In reference to your specific example and where doubt exists as to the original terms of employment, the onus is on the employee to prove that he or she anticipates or plans actual retirement within the "temporary" timeframes. The employee should be able to establish that it is not reasonably anticipated that he or she will remain at the special work site for a period in excess of what ordinarily constitutes a temporary post. Whether an employee can reasonably anticipate remaining at the work site beyond which time he or she qualifies for retirement benefits can only be ascertained with reference to the individual employee, any contract between the employer and the employee pertaining to the new work site and the retirement policies of the employer. One would expect that there would exist an agreement between XXXXXXXXXX and those effected employees which sets out the terms and conditions under which the employee is qualifying for the interim accommodation expenses and set the allowance to cover meals and travel rather than a relocation allowance.
J.A. Szeszycki
for Section Chief
Personal and General Section
Business and General Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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