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: Taxpayer lives 60 kms out of XXXXXXXXXX and works in downtown XXXXXXXXXX . His employer moves the office approx. 1.5 kms to a new location. Taxpayer meets the minimum 40 km distance test and moves his residence to within 6.5 kms of new work location. Whether taxpayer is entitled to $17,090 in moving expenses?
Position: Not entitled to moving expenses.
Reasons: The new work location must be the reason for the move. There would appear to be no valid reason relating to the new work location that would, in and by itself, cause the taxpayer to move.
April 24, 1998
Sudbury TSO HEADQUARTERS
Appeals Division A.M. Brake
(613) 957-8953
Sharon Banfield
980802
Moving Expenses
This is in reply to your memorandum of March 26, 1998 requesting our opinion as to whether a taxpayer is entitled to claim moving expenses in the situation described below.
Situation
The taxpayer moved from one work location in downtown XXXXXXXXXX to another downtown XXXXXXXXXX location (the "new work location") which is approximately 1.5 kms south of the former work location.
The taxpayer claimed moving expenses of $XXXXXXXXXX in respect of costs of moving his residence from XXXXXXXXXX, which is due north of both the old and new work locations. You state that the taxpayer contends that his new residence is 42.5 kms closer to the new work location than his previous residence was to the old work location (the test should be to the new work location).
Subsection 62(1) of the Income Tax Act (the "Act") sets out the requirements that must be met for a person to be eligible to claim moving expenses. The criteria as it relates to your situation is as follows:
1. The person must commence work at a new location (the "new work location").
2. The reason for the move from the old residence to the new residence has to be by reason of commencing work at the new work location.
3. There is a minimum distance requirement in that the distance between the old residence and the new work location is not less than 40 kms greater than the distance between the new residence and the new work location.
For discussion purposes, we will assume that the minimum distance requirement has been met. However, since the taxpayer’s drive to work appears to have been extended by only 1.5 kms, this, in and by itself, would not appear to be sufficient reason to cause the taxpayer to decide to move residence. If it were the case that travelling this additional 1.5 kms took an unreasonable amount of time, say, an additional hour to get to the new work location and another hour to return home, because of having to cross a bridge or some other traffic impediment, it could be sufficient reason to trigger moving residence. However, in the absence of some plausible explanation attributing the reason for moving residence to the new work location, the claim for moving expenses should be denied.
For your information a copy of this memorandum will be severed using the Access to Information Act criteria and placed in the Legislation Access Database (LAD) on the Department’s mainframe computer. A severed copy will also be distributed to the commercial tax publishers for inclusion in their databases. The severing process will remove all material that is not subject to disclosure including information that could disclose the identity of the taxpayer. Should your client request a copy of this memorandum, they can be provided with the LAD version or they may request a copy severed using the Privacy Act criteria which does not remove client identity. Requests for this latter version should be made by you to Jackie Page at (613) 957-0682. The severed copy will be sent to you for delivery to the client.
Jim Wilson
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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.../cont'd
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