CRA indicates that a specified individual splitting full-time work amongst multiple corporations might meet the excluded business activity test on less than 4 hours per week per corporation

A husband and wife collectively work full-time for various of their companies but work no more than an average of 4 hours per week in the business of each company.

CRA found that “[s]ince neither spouse works more than 4 hours in any business carried on by any of the particular corporations they own, the requirements of the bright line test in paragraph 120.4(1.1)(a) would not be met and, as such, it remains a question of fact as to whether either spouse would otherwise be considered to be actively engaged on a regular, continuous and substantial basis in the activities of each such business on the basis of the limited number of hours worked.” However, CRA went on to indicate that “useful” guidance was to be garnered from 2019-0799901C6, which indicated:

[A] husband and wife could both be considered to be actively engaged in the activities of a particular business carried on by their corporation on a regular, continuous and substantial basis for a particular year where the particular business did not require any other workers and only required them to spend on average 5 hours each per week in that business.

Neal Armstrong. Summary of 26 November 2020 STEP Roundtable, Q.9 under s. 120.4(1) – excluded business.