Owner-managers and their advisers need to be wary of housing loans made to a private corporation’s controlling shareholder. In Mast v R, 2013 TCC 309, the Tax Court concluded that the exception to subsection 15(2) of the Income Tax Act for a housing loan found in subsection 15(2.4) did not apply: the Court held that the sole shareholder of Opco received the $1 million loan in issue from the corporation in his capacity as a shareholder. As a result, the Court upheld the CRA reassessment under appeal, which had included the full amount of the loan in the shareholder’s income.
