12 December 1996 External T.I. 9627825 - 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.

		962782
XXXXXXXXXX	M. Eisner

December 12, 1996

Dear XXXXXXXXXX:

Re: Moving Expenses

This is in reply to your letter of August 20, 1996 concerning the above noted subject. We also acknowledge our telephone conversations.

In your letter, you have indicated that you have accepted a one year exchange position in Australia as a teacher. You will continue to be paid by the XXXXXXXXXX while you are in Australia. During the exchange period, you have agreed to exchange accommodation and will live in the Australian teacher's residence while the Australian teacher will occupy your residence. You will continue to pay rent in respect of your residence while the Australian teacher will do likewise. You have indicated that you do not intend to return to Canada during the exchange. At the end of the exchange, you have indicated that you intend to return to your apartment in Canada and continue your employment with XXXXXXXXXX.

Your personal effects such as clothing will be removed from your apartment in Canada while other items (furniture, kitchen utensils, and dishes, etc.) will be left in your apartment. It is your understanding that the apartment you will occupy in Australia will be in a similar state.

You have indicated that you will maintain your Canadian credit cards and your bank accounts in Canada during the exchange. In addition, your employer will continue to provide you with coverage under its health plan.

Our Comments

General comments on moving expenses are set out in the pamphlet "Are You Moving?" which has been enclosed for your convenience.

When an individual moves to and from Canada, there are a number of additional requirements which must be satisfied in order to claim moving expenses on your tax return. One of the requirements is that the individual, during his or her period of absence from Canada, must be a resident of Canada for income tax purposes. A person is considered to be a resident of Canada if Canada is the place where he or she, in the settled routine of his or her life, regularly, normally or customarily lives. It is always a question of fact whether or not a person is a resident of Canada at a particular time. However, on the basis of the information provided to us, it is our view that you will continue to be a resident of Canada.

Although you will be absent from but resident in Canada, we note you will be moving from the residence at which you ordinarily resided to another residence at which, after the move, you will ordinarily reside. Again, based on the information set out above, it is our view that you will be entitled to claim moving expenses in accordance with the rules set out in section 62 of the Income Tax Act because you changed the residence at which you ordinarily resided on the exchange.

We trust our comments will be of assistance to you but caution that they do not constitute an advance income tax ruling and, accordingly, are not binding on the Department.

Yours truly,
John F. Oulton
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch