20 November 1985 Income Tax Severed Letter B-6485 - [Bill C-72 Amendment to Paragraph 62(1)(g)]

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.

TO - ASSESSING DIVISION G.F.V. Wilkie Director

FROM - SMALL BUSINESS AND GENERAL DIVISION

M. Evans 993-7295

November 20, 1985

ATTENTION R.J. Banks
                       Compliance Programs Divisions

RE: Bill C-72 Amendment to Paragraph 62(1)(g)

This is in reply to your memorandum of October 23, 1985, concerning the application of amended paragraph 62(1)(g) of the Act when a taxpayer receives a grant under the Canada Mobility Program.

Assistance under the Canada Mobility Program is administered by Employment and Immigration Canada under the Mobility Regulations (P.C. 1985-785 dated March 14, 1985) formerly known as the Manpower Mobility Regulations. The type of assistance provided is a lump sum allowance based on the distance to be travelled and is intended to provide for assistance to persons who are moved from one place in Canada to another place in Canada in connection with the Canada Mobility Program. Although the allowance may be used for transportation expenses, lodging and meals, there does not appear to be a requirement that it be used for those and no other moving expenses. Employment and Immigration Canada have been advised that allowances paid under these Regulations are not taxable under the Income Tax Act since the recipients are not employees but that they will reduce a claim for moving expenses under section 62 of the Act.

Where a taxpayer receives a $2,000 allowance under the Canada Mobility Program, incurs expenses of $1,000 of the type for which the allowance was provided as well as $1,000 of other moving expenses and both types of expenses qualify for deduction under section 62 of the Act, it is our view that the taxpayer must reduce his claim by the full amount of the allowance, i.e., $2,000. We interpret "such expenses" in paragraph 62(1)(g) of the Act to mean "moving expenses" collectively which are deductible under section 62 of the Act and not specific allowable moving expenses to be matched to the allowance. In the event that an allowance received under the Canada Mobility Program exceeds the amount that a recipient could otherwise claim as a "moving expense" deduction, the excess need not be reported as income. This might occur where the allowance also covers moving expenses not allowed under section 62 of the Act.

for Director Small Business and General Division Specialty Rulings Directorate Legislative and Intergovernmental Affairs Branch