REASONS
FOR JUDGMENT
V.A. Miller J.
[1]
This appeal relates to the Appellant’s 2011
taxation year in which the Minister of National Revenue (the “Minister”) disallowed various expenses. The issues
raised by the Appellant were whether he was entitled to deduct (a) premiums in
the amount of $1,441.56 which he had paid for a private health care plan; and,
(b) rent in the amount of $8,400 for his office.
[2]
The Appellant is in the business of selling
insurance and in 2011 he earned gross commission income of $16,946 from his
insurance sales. In his income tax return, he claimed that he incurred expenses
of $29,960 related to his insurance sales. On reassessment, the Minister
allowed the Appellant to deduct expenses of $16,388. His net commission income
was $558. He reported net income of $31,512 in 2011.
Private Health Care Plan
[3]
In his income tax return the Appellant claimed a
business expense of $1,629 for a private health care plan. At the objection
stage of this case, he changed the amount from $1,629 to $1,442. He stated that
he was following the Tax Guide which accompanied his income tax return. The
Minister disallowed the amount as a business expense but gave the Appellant a
non-refundable tax credit for a medical expense in the amount of $1,442.
[4]
At the hearing of his appeal, the Appellant was
adamant that he should be allowed a business expense for the premiums he paid
for a private health plan. He stated that he did not incur any medical expenses
in 2011.
[5]
The documentary evidence presented by the
Appellant did not support his statement that he had paid premiums to a private
health plan. His premiums were shown as a deduction from his Public Service
Pension with the Federal Government. The definition of “private
health services plan” in section 248 of the Income Tax Act (“ITA”) specifically excludes a plan established
under an Act of Parliament. The premiums paid by the Appellant do not qualify as
deductions.
[6]
In addition, when I consider subparagraph
20.01(1)(a)(i) of the ITA, I conclude that the Appellant did not
meet the requirements of this provision. It reads:
20.01
(1) Notwithstanding paragraphs 18(1)(a) and (h) and subject to
subsection (2), there may be deducted in computing an individual’s income for a
taxation year from a business carried on by the individual and in which the
individual is actively engaged on a regular and continuous basis, directly or
as a member of a partnership, an amount payable by the individual or
partnership in respect of the year as a premium, contribution or other
consideration under a private health services plan in respect of the
individual, the individual’s spouse or common-law partner or any person who is
a member of the individual’s household if
(a) in the year or in the preceding taxation year
(i)
the total of all amounts each of which is the
individual’s income from such a business for a fiscal period that ends in the
year exceeds 50% of the individual’s income for the year, …
[7]
In 2011, the Appellant’s business income was his
profit from his insurance business or $558. This did not exceed fifty percent
of his income for 2011. In 2010, the Appellant’s business income was a negative
amount.
Rental Expense
[8]
In denying that the Appellant incurred a rental
expense of $8,400, the Minister assumed that the Appellant resided at 605-1090 Kristin Way, Ottawa, Ontario. He made no assumptions about where or if the Appellant
had an office.
[9]
The Appellant claimed that his office rental
expense was $8,400 and that his office was located at 605-1090 Kristin Way. He
denied that he lived at 605-1090 Kristin Way and insisted that this apartment
was only used as an office. However, he refused to give his home address or to
answer any questions with respect to his home.
[10]
It was explained to the Appellant at the
beginning of his hearing that he had the onus of showing that the Minister’s
assumptions were incorrect. This he did not do. His evidence on this issue
consisted of self serving statements.
[11]
I have concluded from the evidence that the
Appellant resided at 605-1090 Kristin Way and if he had an office, it was in
his home. The Appellant has not provided any details about his office.
[12]
At the hearing of the appeal, the Appellant
stated that he was entitled to a deduction for registration fee he paid for his
vehicle in August 2008. The present appeal was only with respect to the
Appellant’s 2011 taxation year. His 2008 taxation year was not at issue.
[13]
In conclusion, the Appellant did not incur a business
expense for premiums paid for a private health service plan and he has not
provided evidence to demonstrate that he had an office at 605-1090 Kristin Way.
[14]
The appeal is dismissed.
Signed at Ottawa, Canada, this 16th day of June 2014.
“V.A. Miller”
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