CRA agrees that an obligation to return excess remuneration does not give rise to imputed interest

An employee was obligated to repay excess remuneration previously received. (The payroll service had not been informed that the employee was on unpaid leave.)  CRA indicated that this repayment obligation did not constitute a non-interest-bearing loan to the employee (so that there was no interest imputation under s. 80.4) notwithstanding that it was agreed that the repayment would occur gradually over an extended period of time.

Neal Armstrong.  Summaries of  13 June 2012 Memorandum 2012-0448961I7 F under ss. 8(1)(n) and 80.4(1).