October 07, 2011

Wolf Bergelt (Appellant) v. The Minister of National Revenue (Respondent)

84 DTC 1042
Tax Court of Canada
December 19, 1983

Residence — Taxpayer moving to U.S. to take permanent job but transferred back to Canada shortly thereafter — Not a resident of Canada — Income Tax Act, S.C. 1970-71-72, c. 63, s. 2.

The taxpayer was hired by a corporation resident in Canada as controller and vice-president of the company. In September, 1980 the taxpayer moved to California to take on a permanent position with a wholly-owned subsidiary of the Canadian corporation. The taxpayer left his family temporarily in Canada pending the renovation and sale of his residence. He therefore took few personal effects with him to California and rented a small apartment. It was his intention to buy a house once the house in Canada was sold. The taxpayer kept one bank account in Canada in order to pay for his family’s expenses and the expenses of the house renovation. The taxpayer was paid by the Canadian corporation because he had not yet received a work permit from the U.S. authorities. The taxpayer gave up membership in a number of clubs in Canada and joined one in California. In December 1980, the taxpayer was advised that he was being transferred back to Canada when his work was finished in California. Accordingly, the taxpayer returned to Canada in April 1981. The Minister assessed the taxpayer on the basis that he was a resident of Canada throughout the entire period and the taxpayer appealed to the Tax Court of Canada.

Held: The taxpayer’s appeal was allowed. The Court found that the taxpayer ceased to be a resident of Canada when he moved to California. The most significant fact was that the taxpayer left Canada to take a permanent job outside the country. His family remained behind but that was to be only until the house was renovated and sold.