Dear Colonel Tulk:
Re: Mortgage Interest Differential Benefit Your file 7209-1 (DGCB)
We are writing in reply to your letters of September 24 and December 12, 1990, wherein you requested our views regarding the
24(1)
As we understand it, The Queen's Regulations and Orders for the Canadian Forces provides for the reimbursement of interest rate differentials on first mortgages, for a maximum period of five years and in an amount not to exceed $5,000 on any one posting. The MIDB was and continues to be treated as a taxable benefit under the Income Tax Act (the "Act").
In view of the Federal Court-Trial Division decisions in McNeill v. the Queen, 86 DTC 6477 and Splane v. the Queen, 90 DTC 6442, which held that the "accommodation differential" received by these taxpayers were not taxable benefits, 24(1) Your request is based on the fact that the MIDB is similar to the accommodation differentials in these two decisions.
Our Comments
Since the Department has appealed the Splane decision to the Federal Court of Appeal, we are unable to comply with your request. Until such time as the issues in this case are resolved by the courts, the
Department's position on the taxation of relocation or accommodation allowances remains unchanged. Such allowances received by virtue of an office or employment will continue to be taxed under subsection 5(1) or paragraph 6(1)(8) of the Act, as the case may be.
We trust our comments are of assistance to you.
Yours truly
for DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch