| 19(1) | A. Humenuk |
| (613) 957-2135 | |
| File No. 5-7903 |
June 16, 1989
Dear Sirs:
Re: Home Relocation Loan
We are responding to your letter dated April 11, 1989, concerning section 80.4 and paragraph 110(1)(j) of the Income Tax Act (the "Act").
24(1)
If the loan which gives rise to a taxable benefit under section 80.4 of the Act is determined to be a "home relocation loan" as defined in subsection 248(1) of the Act, the employee is entitled to a deduction from taxable income within the limitations imposed by paragraph 110(1)(j) of the Act. A loan is considered to be a home relocation loan if, among other requirements, it is received by an employee in the circumstances where he has commenced employment at a location in Canada and by reason thereof, has moved from a residence in Canada to another residence in Canada which is 40 kilometres closer to the location of the new employment than was the previous residence. In order to be considered a home relocation loan, it is not necessary that the employment prior to and subsequent to the move be with the same employer.
However, it is a question of fact as to whether a particular taxpayer has changed his place of residence by reason of his change in employment. In the situation you have described, we think it is unlikely that the change in employment would necessitate a change in residence because the new work location is in the same general vicinity as the old work location.
If there are additional facts not presented which would indicate that the taxpayer, in fact, has changed residences because of the change in work location, the taxpayer should submit the relevant details to the local District Taxation Office located at 150 Main Street West, Hamilton, Ontario L8N 3E1 to obtain their view.
We trust our comments will be of assistance to you.
Yours truly,
for Director Small Business and General DivisionSpecialty Rulings Directorate Legislative and IntergovernmentalAffairs Branch