4 April 2000 External T.I. 2000-0009095 - 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: If taxpayer waits nearly 8 years to move to a location because of extending circumstances, can he still claim the moving expenses?

Position: Question of fact but probably not.

Reasons: The eligible relocation must occur to enable the taxpayer to be employed at a new work location.

XXXXXXXXXX 2000- 000909
C. Tremblay
April 4, 2000

Dear XXXXXXXXXX:

Re: Moving Expenses

This is in reply to your letter of February 21, 2000, wherein you requested us to comment on your eligibility to claim moving expenses. You have stated that because of extenuating circumstances, you did not sell your home in XXXXXXXXXX and move to XXXXXXXXXX until XXXXXXXXXX , although you had been commuting to XXXXXXXXXX since XXXXXXXXXX.

XXXXXXXXXX

You are concerned that since you did not move to start a new job, you would not be eligible for the moving expenses.

Our Comments:

The particular circumstances in your letter on which you have asked for our views is a factual situation. As explained in Information Circular 70-6R3, it is not this Directorate's practice to comment on transactions involving specific taxpayers other than in the form of an advance income tax ruling. Since your situation involves a completed transaction, you should submit all relevant facts and documentation to the appropriate taxation services office for their views. However, we have considered your enquiry and have provided some comments below which are of a general nature only.

Subsection 62(1) of the Income Tax Act (the "Act") allows a taxpayer to deduct moving expenses incurred in respect of an eligible relocation which is further defined in subsection 248(1) of the Act as, among other things, a relocation to enable the taxpayer to be employed at a location in Canada, referred to as " the new work location". It is a question of fact whether moving expenses were incurred to enable the taxpayer to be employed at the new work location. Paragraph 15 of Interpretation Bulletin IT-178R3, copy enclosed, states that section 62 of the Act provides that eligible moving expenses are deductible only when the reason for the residential move is to begin employment or business at the new work location or to begin full-time attendance at an educational institution. There is jurisprudence that supports that there is no time limit within which a taxpayer must move following the commencement of employment in the new location. However, we are of the view that the longer the length of time separating the move from the commencement of a new employment, the more it becomes difficult to consider that the relocation was due to the fact that the employee moved because he began a new employment at a new work location.

We trust that these comments will be of assistance.

Yours truly,

Jim Wilson
for Director
Business and Publications Division
Income Tax Rulings Directorate
Policy and Legislation Branch

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