Meilleur – Tax Court of Canada finds that high-risk and high-yield loans were not made in the course of a money-lending business

Bocock J found that a retired husband and wife, who used their own retirement funds and their line of credit in 2006 and 2007 to make five loans to two real estate developers at interest rates ranging from 15% to 24%, were not thereby engaged in a money-lending business given inter alia that they made the loans on a pooled basis along with other investors rather than being involved in negotiating and managing the loans. (Somewhat oddly, he also referenced in this regard that they “advance[d] funds solely for the purpose of earning interest, rather than turning the loans over for a profit in the nature of a business.”)

Consequently, the almost complete loss of their investments was a capital loss.

Neal Armstrong. Summary of Meilleur v. The Queen, 2016 TCC 287 under s. 20(1)(p)(ii).