Cases
Rumford v. The Queen, 94 DTC 6121 (FCA)
An individual who was a "commended worker" in the Plymouth Brethren Assembly and who preached at various congregations as well as lecturing at Bible School and counselling members of different congregations, was found to hold an office at the Erindale Bible Chapel in respect of $14,640 allocated to him by the elders of that Chapel, but not in respect of voluntary contributions made by members of the Erindale Bible Chapel congregation through envelopes on which his name was endorsed. The additional monies could not be said to be derived from an "office" because the amount was not "fixed or ascertainable".
Merchant v. The Queen, 84 DTC 6215, [1984] CTC 253 (FCTD)
Reed, J., tentatively concluded, in obiter dicta, that sums that would have been received by an individual as leader of the Saskatchewan Liberal Party would not be received from an "office" because it could not be said that such a leader knows before taking office, with any degree of certainty, what the amounts would be.
See Also
9098-9005 Québec Inc. v. The Queen, 2012 DTC 1284 [at 3864], 2012 TCC 324
The taxpayer's director ("Mr. Gitman") and his two sisters inherited equal interests in a number of properties and a business, which they held in a de facto partnership. The partnership's properties and business were managed principally by the taxpayer, which was owned, operated and staffed solely by Mr. Gitman.
In the course of finding that the taxpayer was engaged in a "personal services business" under s. 125(7) and therefore not entitled to a s. 125(1) small business deduction, Bédard J. found that, but for the existence of the taxpayer, Mr. Gitman would have been an officer of the partnership. He stated (at para. 45):
To summarize once again, an "officer" as defined in the Act:
(i) is a position entitling one to a fixed or ascertainable stipend or remuneration;
(ii) denotes a subsisting, permanent, substantive position which has an existence independent of the person who fills it;
(iii) does not require the individual to be in the service of some other person;
(iv) is created by statute or some other instrument instead of being created by or dependent upon a contract of service between an employer and the particular holder of the position.
MNR v. Real Estate Council of Alberta, 2012 DTC 5099 [at 7059], 2012 FCA 121
A member of the taxpayer was entitled in her position to a per diem payment but the number of days she worked was not fixed or ascertainable in advance, which led the Tax Court below to conclude that the member had not received a fixed or ascertainable stipend or remuneration, as stipulated in the s. 248(1) definition of "office." The Court disagreed and granted the Minister's appeal. Stratas J.A. stated (at para. 5):
[I]n our view, the phrase "the position ... [must be one] entitling" the individual to "stipend or remuneration," means nothing more than a position for pay: Vachon Estate v. Canada, [2010 DTC 5038], 2009 FCA 375 at paragraphs 38-43.
Sénéchal v. The Queen, 2011 DTC 1357 [at 1997], 2011 TCC 365
The taxpayers were police union representatives. They were allowed to perform their duties outside the hours the hours of work with their employer. Lamarre J. stated (at para. 29):
In such a case, the Expense Policy provided that the members of the Police Union's executive were entitled to a $50 allowance for each instance of participation in a union activity, up to the maximum total contemplated in the said Expense Policy. In my opinion, this constitutes fixed or ascertainable remuneration.
Boisvert v. The Queen, 2011 DTC 1296 [at 1670], 2011 TCC 290
Real property with a value of $68,000 was devised to the taxpayer (conditional upon settlement of the estate) "as a token of gratitude for the services" the taxpayer was called upon to perform under the will as liquidator of the estate. The taxpayer accepted his appointment as liquidator. Tardif J. found that the value of the property was remuneration from an office. The fact that the compensation was generous relative to the level of work performed did not alter this finding.
Edwards v. Clinch, [1982] A.C. 845, [1982] BTC 109 (HL)
A civil engineer carried out public inquiries from time to time for the Secretary of State for the Environment, and received a per diem fee for doing so. It was held that holding an inquiry did not make him the holder of an office, and his fees accordingly were taxable as professional income rather than as income from an office or employment. The word "office" "must involve a degree of continuance (not necessarily continuity) and of independent existence; it must connote a post to which a person can be appointed, which he can vacate and to which a successor can be appointed," whereas the positions of the taxpayer were "'tailor-made'" to his talents.
Administrative Policy
16 March 2015 T.I. 2014-0521791E5 - Estate Trustee Fees
A lawyer who did not practice as an estate executor or trustee, was asked by the deceased to act as the executor of her estate primarily as she trusted him and he had represented her in prior cases. Are the lawyer's trustee fees income from a business or an office? CRA responded:
Where the estate trustee is a person who does not act in this capacity in the course of carrying on a business, the fee for acting as estate trustee is considered to be income from an office. Such a situation could exist even where the estate trustee is a lawyer if the normal practice does not include the administration of estates and the lawyer was appointed on personal grounds; for example, because he or she was a friend of the deceased.
…Where a trustee fee…is treated as income from an office the estate must withhold income tax and Canada Pension Plan contributions…and prepare a T4… . Generally, a person making a payment of fees, commissions or other amounts for services described in paragraph 153(1)(g)… is required…to make an information return in prescribed form (T4A)… .
7 November 2014 Memorandum 2014-0549861I7 - Fixed or ascertainable stipend or remuneration
The XX (who generally have had a professional practice) are appointed by order in council and receive a fixed amount per file. Does the incurring by them of unreimbursed expenses (e.g., for laptops) render their remuneration not fixed or ascertainable? In finding that the XX held an "office," CRA stated:
2011 FCA 314…and the Real Estate Council (Alberta) (2012 FCA 121)…stand for the position that it is not required for the number of sittings to be known in advance… . These FCA cases opine that a legal entitlement to a per diem rate of remuneration established in advance is sufficiently fixed or ascertainable to meet the definition of "office".
Since "stipend and remuneration" are considered to refer to gross (not net) amounts under the definition of "office", unreimbursed expenses (whether or not the nature or quantum of the expenses is known in advance by the individual) are not considered when determining whether a particular amount is fixed or ascertainable.
18 March 2014 T.I. 2012-0438941E5 - Deduction of expenses against executor fees
Where an executor of an estate in receipt of fees does not earn the fees in the course of a business, the fees will be considered to be income from an office.
30 October 2012 Ontario CTF Roundtable Q. 10, 2012-0462961C6
CRA stated that, notwithstanding the archiving of IT-377R, it is still its view that:
Fees earned by a taxpayer for acting in the capacity of an executor in the course of a business are included in the business income of the taxpayer under subsection 9(1) of the Act. Where the taxpayer does not act in the course of carrying on a business, the executor fees are included in income under paragraph 6(1)(c) of the Act.
17 December 2012 T.I. 2012-0458071E5 - Per Diem Fees
Per diem judges and per diem justices of the peace, who are former full-time judges and former full-time or part-time justices of the peace, are paid a fixed rate per day of work, and are not provided with an office space, office supplies or secretarial/administrative assistance. In finding that they hold an office, CRA stated that the:
case law on the subject...specifies that a legal entitlement to a per diem rate of remuneration established in advance is sufficiently "fixed or ascertainable" to meet the definition of an "office".
22 June 2012 T.I. 2012-043449
Before concluding that honoraria paid to board members should be reported on a T4 rather than T4A slip (and were subject to source deductions), CRA stated:
When an individual is a member of a board by virtue of being appointed in a representative capacity and a fixed or ascertainable honorarium or fee is paid, it is our view that the amount would be taxable as income from an office or employment. This position is consistent with case law on the subject, which specifies that a legal entitlement to a per diem rate of remuneration established in advance is sufficiently "fixed or ascertainable" to meet the definition of an "office".
IT-377R "Director's, Executor's and Juror's Fees
30 September 2010 T.I. 2010-037688
In light of the definition of "office" in s. 248(1), remuneration paid to board members is considered to be income from an office and subject to withholding of tax at source.