Principal Issues: 1) Whether a personal services business (PSC) is allowed to own any assets, such as motor vehicle, computer equipment. 2) If a PSC provides an automobile, for which a taxable benefit is assessed to an incorporated employee, can it claim capital cost allowance for the related asset.
Position: 1) A PSC can own assets. 2) A PSC can not claim capital cost allowance for an asset where an incorporated employee is assessed a taxable benefit for the use of that asset.
Reasons: 1) Paragraph 18(1)(p) does not prevent a PSC from owing assets, such as a motor vehicle or computer, but rather places a restriction on the expenses that can be claimed in computing taxable income. 2) Capital cost allowance can not be claimed as indicated in paragraph (24) in 758997 Alberta Ltd. v The Queen 2004 TCC 755.