INCOME TAX |
Johnston v. Canada (Attorney General)
A-218-02
2003 FCA 185, Sharlow J.A.
8/4/03
5 pp.
Judicial review of Tax Court of Canada's decision ([2002] 2 C.T.C. 2586) interest expenses incurred not within definition of "moving expenses" in Income Tax Act, s. 62(3)--In August, 1999, applicant moved from Toronto to Winnipeg, where earned income from employment--Applicant owned mortgage-free home in Toronto--Bought new home in Winnipeg in September, 1999, using proceeds of two bank loans secured by residence in Toronto--Toronto residence sold in November, 1999 and proceeds of sale used to repay two bank loans--Interest expense subject of present application accrued between September and November, 1999 --According to s. 62(3), "moving expenses" includes expense incurred as "interest . . . in respect of the old residence" but "for greater certainty, does not include costs . . . incurred by the taxpayer in respect of the acquisition of the new residence"--Definition of "moving expenses", read in its entirety, indicating interest on money borrowed to purchase home in new work location not within definition, even if loan secured by mortgage on home in former work location-- Ample evidence before Tax Court Judge to support conclusion applicant used borrowed money to purchase home in Winnipeg--Thus applicant precluded from claiming interest on borrowed money as moving expense--Application dismissed--Income Tax Act, R.S.C., 1985 (5th Supp.), c. 1, s. 62(3).