Subsection 15(1) of the Income Tax Act could apply where Aco loans money to Bco and Bco has no means of repaying the money. On the other hand, subsection 246(1) will not apply where Bco and its shareholder have no…
Purported shareholder loan repayments treated as income
In Kumar v R, 2024 TCC 105 (informal procedure), the Court found that the CRA had properly reassessed the appellant to include in his income payments to him and his son made by a corporation to which the appellant had…
Foreignco owning a vacation property
The CRA confirmed that a non-resident corporation that owns a Canadian vacation property confers a benefit on its non-resident shareholders where the shareholders or non-arm’s length persons use the property. The benefit, as a deemed dividend (214(3)(a)), is subject to…
Accounting entries, again
In Houle c. Le Roi, 2023 CCI 2, the Court considered assessments that alleged a shareholder received a benefit in two taxation year because of an (unsupported) increase in the credit balance of the shareholder loan account. The Court held…
Corporate guarantee of shareholder loan
A shareholder of a corporation borrows money for an income-earning purpose, and the corporation guarantees the loan, which guarantee is secured by a mortgage on corporate-owned property. The shareholder pays a reasonable guarantee fee to the corporation. The shareholder is…
Inter-company loans
In Vine Estate v R, 1 C.T.C. 18, 29 F.T.R. 59, 89 D.T.C. 5528 (FCTD), husband and wife owned 50% each of the shares of Canco, and husband owned all of the shares of a Florida corporation (Sisterco). Canco…
Tenant improvements and 15(1)
Wise v R, 2019 TCC 196, … a shareholder successfully argued that tenant improvements made by a related corporation did not confer an immediate benefit for the purposes of subsection 15(1) due to the provisions of the specific legal…
Odd Space
In Laliberté v R, 2018 TCC 186, the Tax Court considered whether the controlling shareholder of Cirque du Soleil had received a $38 million shareholder benefit for a trip he took to the International Space Station that was paid for…
Dividend caps
I like dividend caps on fixed-value shares. I’ve complained before about the odour emanating from shares that are entitled to unlimited dividends but that are redeemable and retractable for a fixed amount. The CRA seems to smell something too, in technical interpretation 2016-0626781E5.
Section 160 and shareholder benefits
Can the Minister assess a taxpayer under section 160 in respect of an amount already included in the taxpayer’s income under subsection 15(1)? From Justice Bocock, in Parihar v R, 2015 TCC 52 at ¶45: shareholder who has been…