30 July 2002 Ministerial Correspondence 2002-0148224 - MC MOVING EXPENSES XXXXXXXXXX

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 CCRA.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.

Principal Issues:

Whether or not moving expenses reimbursed by XXXXXXXXXX to an officer, to enable the officer to move out of a remote place upon retirement, constitutes a taxable benefit.

Position:

No. Referred the matter to the TSO to adjust the return.

Reasons:

The position in paragraph 36 of IT-470R regarding remote places, applies to XXXXXXXXXX , and therefore the moving expenses are not taxable. Further, since the original move to XXXXXXXXXX was an eligible relocation, subsection 6(20) rather subsection 6(19) applies with respect to the reimbursement of the housing loss.

XXXXXXXXXX

July 30, 2002

Dear XXXXXXXXXX:

The Honourable Elinor Caplan, Minister of National Revenue, has asked me to reply to your letter addressed to XXXXXXXXXX, concerning the income tax treatment of certain moving expenses and a housing loss that were reimbursed by your former employer, XXXXXXXXXX forwarded a copy of your letter to Minister Caplan on June 11, 2002.

I am pleased to inform you that the moving expenses that you were reimbursed should not have been included in your employment income. Further, only one-half of the housing loss that was reimbursed in excess of $15,000 is a taxable benefit. In situations where an employer pays the expenses of moving an employee and the employee's family and household effects out of a remote place at the termination of the employment, there is no taxable benefit with respect to the moving expenses. In this regard, XXXXXXXXXX is considered a remote place.

With respect to the taxation of the housing loss, where an employee is moved to a remote location and the move was an eligible relocation as defined under subsection 248(1) of the Income Tax Act, the housing loss can qualify for beneficial tax treatment, providing it was understood at the time that the employee would be compensated for a loss suffered on the sale of his or her house when relocated out of the remote place,.

Mr. Randy Hewlett, an official of the Income Tax Rulings Directorate, has discussed your situation with Ms. Val Bortolin, Assistant Director of Individual Client Services and Benefits at the Sudbury Tax Services Office. Ms. Bortolin will ensure that your concerns are addressed and the appropriate adjustments are made to your 2001 income tax return. Consideration may also be given to allowing you to make restitution to your RRSP without causing tax implications for 2002. If you should have any further questions regarding this matter, I invite you to contact Ms. Bortolin by calling 0-705-671-0290 collect, or by writing to the Sudbury Tax Services Office, 1050 Notre Dame Avenue, Sudbury ON P3A 5C1. She is aware of our correspondence and will be pleased to provide assistance.

I trust the information provided is helpful.

							Yours sincerely,

							Bill McCloskey
							Assistant Commissioner
							Policy and Legislation Branch

Randy Hewlett
957-8973
2002-014822