18 January 1996 Internal T.I. 9528817 - ELIGIBILITY TO CLAIM 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.

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:

whether the decision in the Glaubitz case can be interpreted to mean that an individual who is unemployed following the move is ineligible to claim moving expenses.

Position:

The Glaubitz decision can be distinguished from the general unemployment situation. As long as the move is for the purpose of commencing employment at any time at the new work location the individual is entitled to claim moving expenses.

Reasons:

In Glaubitz the taxpayer did not relocate to a new work location, he moved closer to his existing source of employment.

		January 18, 1996

	Winnipeg Tax Centre	Headquarters
	Enquiries and Adjustments	J.A. Szeszycki
F. Vivash, Assistant Director	(613) 957-8953

Attention: D. Pobihushchyj
		952881

Eligibility to Claim Moving Expenses

This is in reply to your enquiry dated October 26, 1995 in which you requested our views concerning the impact of the 1995 court decision in Glaubitz v. the Queen 95 DTC 654 upon the eligibility of unemployed individuals who incur moving expenses on relocation to claim such expenses under section 62 of the Income Tax Act (the "Act"). You have indicated that the decision, which was favourable to the Department, is being used to support the disallowance of claims being reviewed in the course of a post-assessment project.

Generally, the circumstances that form the basis of your enquiry are that an individual moves from one location to another in Canada. The minimum distance criteria is not an issue. Prior to the relocation the individual was unemployed. In the period immediately following the move the individual remained unemployed but either later in the year or in the immediately following year the person found employment and earned sufficient income to absorb part or all of the moving expenses incurred.

In the Glaubitz case, the taxpayer moved to Edmonton, Alberta from Camrose, a community located southeast of Edmonton. The taxpayer was a member of a union, Boilermakers Local 146, located in Edmonton, which was the source of employment referrals to various job sites within the province. At the time of the relocation the taxpayer was unemployed and in the period immediately following the move he remained unemployed. By his own testimony his move was for the purpose of being closer to his source of employment referrals, the union. The court concluded that since the reason for the move was to be closer to his source of employment and the location of that source had not changed, the taxpayer could not be considered to have moved for the purpose of commencing employment at a new work location as intended by the provisions of subsection 62(1) of the Act. In its decision the court cited Crampton v. M.N.R. 80 DTC 1233 in which the circumstances were almost parallel.

These cases, in our view, are distinguishable from the general situation described in your enquiry in that they do not involve a change in the work location such that the taxpayer could be considered as having moved to a "new work location".

As far as the individual's status of employment is concerned, before or after the move, it is our view that an individual is not required to be employed at the new location immediately after the move in order to be eligible to claim qualifying expenses. It is sufficient that the move to the new work location be made for employment purposes. As a consequence, where the Department is satisfied that the purpose criterion is met, the only limitation on the amount of the claim is the level of employment income, or self-employed income earned at the new work location in either the year of the move or the immediately following taxation year.

P.D. Fuoco
Section Chief
Personal and General Section
Business and General Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch