Principal Issues: Whether a taxpayer would be entitled to deduct moving expenses?
Position: No.
Reasons: The definition of an eligible relocation requires that the new residence be at least 40 kilometres closer to the new work location than the old residence was.
April 15, 2004
XXXXXXXXXX
Dear XXXXXXXXXX:
Mr. Alan Nymark, Commissioner of the Canada Revenue Agency (CRA), has asked me to reply to your letter of March 4, 2004, concerning your entitlement to deduct moving expenses.
The Income Tax Act provides that, subject to certain conditions and limits, a taxpayer may deduct moving expenses paid for an eligible relocation. The term "eligible relocation" as defined in the Act, requires, in part, that the relocation must occur to enable the taxpayer to be employed at a new work location in Canada, that both the residence at which the taxpayer ordinarily resided before the relocation and the residence at which the taxpayer ordinarily resided after the relocation must be in Canada, and that the new residence must be at least 40 kilometres closer to the new work location. The courts have established that the 40-kilometre distance is measured by using the shortest normal route available to the travelling public.
The role of the CRA is to administer and enforce the Act as adopted by Parliament and interpreted by the courts. The CRA is committed to applying the tax laws consistently and fairly; however, it does not have the discretion or right to change the Act.
Consequently, if as suggested in your letter, your new residence is not at least 40 kilometres closer to your new work location than your old residence was, you would not be entitled to deduct moving expenses.
I trust that these comments will be helpful.
Yours sincerely,
Stephen Rigby Assistant Commissioner Policy and Planning Branch
K. Power -957-8968
2004-006771
March 23, 2004
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