Re: Relocation Expences from employer
 

Is it up to the employer to include such amounts on the T4?

Re: Relocation Expences from employer
 

Basically yes. If you wanted to be an angel then you could add an amount to line 104 of your tax return.

The CRA will check that the amount you report on line 101 agrees with the T4 or T4s issued by employers. It it does they will are unlikely to take the matter further. It would only come to light if the employer was audited and, even them, it could easily be overlooked because moving expenses paid for removals within Canada would not normally trigger a T4 benefit.

If the CRA do spot the error they will ding the employer first for tax and CPP they should have withheld.

Re: Relocation Expences from employer
 

I'm rather taken aback by this. Surely reimbursement of expenses cannot be considered as a benefit?! That would mean that, for example, if the company flew you over, the air tickets are taxable?!

Re: Relocation Expences from employer
 

It depends upon the nature of the expenses. Reasonable expenses incurred in the course of employment are, of course, not a benefit.

However, moving costs are a personal expense. If you decide to move house you don't expect a tax deduction for the expenses. In the same way a vacation is a personal expense. You pay for it out of after tax income. It an employer paid for it you would expect to be assessed a taxable benefit. It does not change from being an after-tax expense to a pre-tax expense just because the employer paid it on your behalf.

In section 62 the ITA allows a deduction from certain income for most moving expenses for an eligible relocation. If the employer provides a relocation allowance or reimburses any of these expenses this must be added to income before moving expenses are deducted. Two things to note: the employer's contribution is added to income and it must be for an eligible relocation. An eligible relocation is defined (with a few exceptions) as being from one place in Canada to another place in Canada.

That is the law as I see it.

In practice, if an employer pays moving expenses directly rather than providing an allowance they do not report these on a T4 and the employee does not claim a moving expense deduction under section 62.

Current CRA practice is that if the employer pays directly some expenses that are not eligible for a section 62 deduction there do not usually treat it as a taxable benefit as long as it is reasonable in the circumstances. (My highlighting)

I don't think this concession is intended for the whole cost of international moves and if it is explicitly being used this way it is being used to get around what I think is, in fact, a taxable benefit.

Re: Relocation Expences from employer
 

Thanks for your analysis, Jon.

But, that's a potential tax nuisance. Looks like it'll be back to the brown paper bags full of used notes again... ;)

Re: Relocation Expences from employer
 

As long as it's not my problem unless I hear otherwise that's good enough for me.

Re: Relocation Expences from employer
 

As I said to jimf, if the employer is paying for it it is the employer's responsibility to report it. From anecdotal evidence from this site over a few years the vast majority of employer's don't.

Re: Relocation Expences from employer
 

To clarify our situation

As JonBoyE said the CRA and/or the company overlooked the first two weeks accomodation (company flat so no money ever left company) BUT we paid tax on the lump sum (quite lot) and it scuppered our plans some what

We went through this
http://www.cra-arc.gc.ca/E/pbg/tf/t1-m/README.html

and as we weren't factual or deemed residents then we had to pay tax

Re: Relocation Expences from employer
 

<decides to say no more on this thread>.

Re: Relocation Expences from employer
 

Actually I expressed myself wrong. We didn't make any kind of decision - it was taxed for us at source by the employer and given they then put it on the T4 or whatever we had no choice.

Obviously we didn't declare it ourself when there was no need.

i think its really down to how the employer treats it.

My employer reimburses flights and actual expenses but doesn't declare this as a taxable benefit.

Re: Relocation Expences from employer
 

I think your UK employer can give you as much as £8k in the eyes of HMRC, but they don't have to. Mine gave half that amount :thumbdown: