JET747

Can you claim any tax rebate on removal costs ? If you have a job offer first and move across I was wondering if I could claim anything back for the removal and for the flights etc ?

Worth trying maybe ?

Thanks

JET

JonboyE

A new immigrant can not claim moving expenses to get to Canada.

You claim a deduction if you move from one place in Canada to another place in Canada for work, business or study. The only exception is when you are posted to and from Canada. For example, military or diplomatic personnel, or international business people. These people will be tax-resident in Canada both before and after the move.

Auld Yin

http://www.cra-arc.gc.ca/tx/ndvdls/t.../menu-eng.html

JET747

Maybe then ?

I had relocation and this was paid after I got here which I paid tax on in Canada......I will get myself an accountant who can argue the finer points...

Even if it is $100..

JET

minimeeze

We claimed our full immigration costs as I moved here for work, sat exams to be able to do my job etc.

JonboyE

There is no maybe about it. If you go to an accountant and they say you should claim this as a deduction then don't pay them, because they are incompetent.

You were lucky. In my experience claims for moving costs and large medical expenses are the two things most likely to trigger follow up inquiries from the CRA.

No1_mom

http://www.cra-arc.gc.ca/tx/ndvdls/t.../q/q1-eng.html

I got the following by saying I was moving from outside of Canada for work:

**************************
Can you claim moving expenses?
Answer

You can claim the deduction for moving expenses.

Complete Form T1-M, Moving Expenses Deduction, to calculate the moving expense deduction that you are eligible to claim on line 219 of your return.

Read Expenses you can deduct and Expenses you cannot deduct.

If you received a reimbursement or an allowance for eligible moving expense that is not included in your income, the deduction that you claim must be reduced by the amount of the reimbursement or allowance that you received.

Notes
If you are eligible to claim the costs relating to the sale of your former home and you have not sold it before the time you file your return for the year of the move, claim on your return your eligible moving expenses to date.

If the moving expenses that you paid in the year of the move are more than the income earned at the new location in that same year, you can deduct the unused part of those expenses from employment or self-employment income earned at the new location in the following years. You cannot deduct your moving expenses from any other type of income, such as investment income or Employment Insurance benefits, even if you receive this income at the new location.

When your former residence is sold, submit a T1-ADJ, T1 Adjustment Request, or a signed letter indicating your name, address, daytime telephone number and social insurance number, with supporting documents for your requested change, an explanation of the delay in selling your home, and the documents supporting your original claim if they have not been submitted. Send this information to the Individual Client Services and Benefits Division of your tax centre.
You have told us:

* you are an employee or a self-employed individual who moved from outside Canada to a new work location in Canada, from Canada to a new work location outside Canada, or between two locations outside Canada;
* you are a deemed or factual resident, and the move was from one place where you ordinarily resided to live in another place where you will ordinarily reside;
* you moved during the year and established a new home to start a new job or a business;
* you earned employment income or self-employed income at your new location;
* your new home that you established is at least 40 kilometres closer to the new place of employment or business than your previous home was.

JonboyE

Income Tax Act:

62. (1) There may be deducted in computing a taxpayer’s income for a taxation year amounts paid by the taxpayer as or on account of moving expenses incurred in respect of an eligible relocation, to the extent that ...

248(1) “eligible relocation” means a relocation of a taxpayer where

(a) the relocation occurs to enable the taxpayer

(i) to carry on a business or to be employed at a location in Canada (in section 62 and this subsection referred to as “the new work location”), or

(ii) to be a student in full-time attendance enrolled in a program at a post-secondary level at a location of a university, college or other educational institution (in section 62 and in this subsection referred to as “the new work location”),

(b) both the residence at which the taxpayer ordinarily resided before the relocation (in section 62 and this subsection referred to as “the old residence”) and the residence at which the taxpayer ordinarily resided after the relocation (in section 62 and this subsection referred to as “the new residence”) are in Canada, and

(c) the distance between the old residence and the new work location is not less than 40 kilometres greater than the distance between the new residence and the new work location

except that, in applying subsections 6(19) to (23) and section 62 in respect of a relocation of a taxpayer who is absent from but resident in Canada, this definition shall be read without reference to the words “in Canada” in subparagraph (a)(i), and without reference to paragraph (b);

In other words, you can only deduct the cost of an international move if you are absent from, but resident in, Canada. A new immigrant is absent from, and not resident in, Canada before they move here. They are present in, and resident in, Canada after they move here. (Note that when the Income Tax Act talks of being resident it means being tax-resident which is not always the same as being resident for immigration purposes).

Alan2005

Looks like some people should hope they don't get an audit.

Auld Yin

I, for one, hope they bloody well do get audited.

JonboyE

Incidentally, as a follow up to this and a discussion we had over a year ago, I saw something of interest in a tax commentary I read recently.

For a Canada to Canada relocation the employee can claim the deduction if they satisfy the other criteria. The employer can reimburse reasonable expenses and claim a business deduction. This is not considered as a taxable benefit for the employee but, of course, the employee cannot claim a personal deduction for expenses the employer has reimbursed.

Employer pays - no taxable benefit. Employee pays - claims a deduction. Seems reasonable.

This commentator said they can't see why the same would not apply to moving expenses the employer paid to a new immigrant. They are a business deduction and not a taxable benefit to the employee. The CRA acknowledge this to be the case if an employer requires an employee to transfer from the employer's place of business abroad to their place of business in Canada. They don't (and nor does the ITA (AFAIK) say it applies to new immigrants.

To me, this goes against the spirit of the ITA and relies on what the ITA doesn't say, rather than what it does. Still, if it doesn't say you can't do it ...

If this is the case then there is some scope to get creative with a compliant employer to sacrifice taxable salary for non-taxable reimbursement of expenses. I don't guarantee it will work if it comes under scrutiny.

Novocastrian

To the best of my recollection, that's what my employer did when I came in 1993. No scrutiny (so far).

JonboyE

I think you are safe now.

Novocastrian

As I understand it, I was safe all the time. The employer may have taken a tiny risk.

minimeeze

I gave my accountant all the information he asked for. HE was the one who informed me it was tax deductible and HE was the one who prepared and filed my taxes. I am still trying to get my head around the Canadian tax system as I'm so confused by it all.
If there is any comeback from Revenue Canada, then I shall hold my accountant liable for misinformation