Lowe v. Canada
A-172-95
Stone J.A.
13/3/96
14 pp.
Appeal from Tax Court judgment including portion of cost of expense-paid trip taken by appellant and wife to New Orleans on basis appellant received taxable "benefit" under Income Tax Act, s. 6(1)(a)-Appellant account executive of Wellington Insurance Co. responsible for maintaining and developing relationships with independent insurance brokers and encouraging them to sell Wellington insurance policies-Wellington had no sales force of its own and relied on independent brokers who also sold competitors' insurance-Broker incentive plan awarding trip for two to New Orleans if meeting certain quota of Wellington insurance sales-Appellant and wife attended at New Orleans with successful brokers at employer's request and expense-Expenses totalled $2,353 per person-MNR assumed business portion of cost of trip no greater than 38% for appellant and 25% for wife-Appellant attended as employee of Wellington and at direction of supervisor-Required to make sure "his" brokers had good time-Appellant's wife expected to attend to "improve relationships"-Tax Court Judge concluded only 20% of appellant's expenses represented taxable benefit but left unchanged MNR's assessment with respect to spouse-Concluded principal purpose of trip not personal pleasure-Appeal allowed-Appellant and wife constantly occupied with brokers and wives and had little time for personal pleasure-Important factor: whether material acquisition which confers economic benefit on taxpayer-No part of appellant's trip expenses should be regarded as personal benefit unless that part represents material acquisition for or something of value to him in economic sense and if part representing material acquisition or something of value mere incident of what was primarily business trip, it should not be regarded as taxable benefit within Act, s. 6(1)(a)-Any pleasure derived by appellant merely incidental to business purposes having regard to fact overwhelming portion of appellant's time in New Orleans devoted to business activities-Tax Court Judge erred in treating expenses of appellant's spouse as personal benefit under Act, s. 6(1) (a)-Evidence clear during period of stay in New Orleans, appellant's spouse attended same meetings as husband with same objectives in mind and devoted vast percentage of time attending brokers and wives-Personal enjoyment merely incidental to primarily business trip by both spouses for purpose of advancing employer's business interests-Conclusion reinforced by Income Tax Interpretation Bulletin IT-470R-Income Tax Act, S.C. 1970-71-72, c. 63, s. 6(1)(a).