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:
whether a northern resident student attending school in non-prescribed area can claim both an amount under 110.7 & moving expenses
Position TAKEN:
yes
Reasons FOR POSITION TAKEN:
see e4m0067. While a claim for moving expenses requires a move from one place of ordinary residence to another place of ordinary residence, the student can still be resident in the former place during the period that the new residence is her ordinary residence while at school
June 27, 1994
WINNIPEG TAXATION CENTRE Rulings Directorate
T1 Client Services A. Humenuk
957-8953
Attention: Vince Wold
940576
Northern Residents Deduction and Moving Expenses
We are replying to your memorandum of March 7, 1994 concerning the interaction between a claim for moving expenses under subsection 62(1) of the Income Tax Act (the Act) and a claim for the northern residents deduction under section 110.7 of the Act. We apologize for the delay in responding.
You have asked us to consider a situation where a student who normally resides in the Northwest Territories relocates to Calgary in order to attend university for the period of September to May. Under the territorial student assistance program, the student receives a reimbursement of the travel expenses incurred in order to attend the university in Calgary. The reimbursement by the Territorial Government is included in the student's income under paragraph 56(1)(n) of the Act. You ask whether a student can claim the northern residence deduction and moving expenses in the same taxation year.
As we understand your comments, it is your view that a student could not claim both the moving expense deduction and the northern residents deduction because one of the conditions necessary to claim a moving expense deduction is that the individual change their ordinary place of residence. It is your view that such a change in residence would reduce the period during which the individual resided in the prescribed northern zone and thus a student would not ordinarily be entitled to a northern residents deduction because the actual period of residency in the prescribed northern zone would be less than six consecutive months.
The attached correspondence dated October 23, 1989 provides general comments which may be useful in addressing your queries. As indicated in that memorandum, it is our view that in the appropriate circumstances a student may be entitled to claim both the northern residents deduction as well as moving expenses to or from university. Consequently, you cannot use the fact that a student claimed moving expenses as the rationale for disallowing a claim for a northern residents deduction.
You are concerned that the phrase "... and by reason thereof has moved from the residence in Canada at which, before the move, he ordinarily resided ... to a residence in Canada at which, after the move, he ordinarily resided ..." found in subsection 62(1) of the Act suggests that an individual must give up his or her former residence in order to claim moving expenses. While moving expenses are not deductible in respect of a sojourn at a particular place, it was never the intent to prevent a student from claiming moving expenses because the student has strong ties with the family home and intends to return to that residence at the end of the school year. Indeed, the Department's published material, such as the pamphlet "Should Students file a tax return?", suggests that students will ordinarily be entitled to moving expenses as long as they have the appropriate source of income from which to deduct the expenses.
Although there may be borderline cases where the question of residency is subject to debate it is hoped that our comments will assist you in resolving the queries being received.
In the above comments, unless otherwise stated, all statute references are to the Income Tax Act S.C. 1970-71-72, c.63 as amended, consolidated to June 10, 1993.
P.D. Fuoco
Section Chief
Personal and General Section
Business and General Division
Rulings Directorate
Legislative and Intergovernmental
Affairs Branch
c.c.Assessment of Returns Directorate
Client Assistance Directorate
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