If you teach at a private school, and the school offers your children discounted tuition as part of your compensation package, what is the value of the benefit that must be included in your income for the purposes of the Income Tax Act? In Spence v. The Queen, 2010 TCC 455, the Tax Court felt bound to conclude that the benefit should be measured as the difference between the cost to the school of providing the education and the discounted tuition. The Federal Court of Appeal has overturned this decision on the basis that the value of the benefit—the amount to be included in the employee’s income for tax purposes—should be the fair market value of the benefit conferred less the tuition actually paid, where the fair market value is measured by what parents who aren’t teachers would pay to send their kids to the school. See Canada v. Spence, 2011 FCA 200.
