Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
| 24(1) |
File No. 900554 |
| |
W.C. Bailey |
| |
957-2061 |
Attention: 19(1)
June 22, 1990
Dear Sirs:
Re: Subsection 15(2) of the Act
This will reply to your letter of April 24, 1990 concerning the timing of the application of subsection 15(2).
We agree with your interpretation of these provisions that it is the status of the debtor at the time a loan is received that determines whether subsection 15(2) applies and would not be redetermined thereafter with respect to the same loan simply because the debtor has later become a shareholder. Therefore, where a Canadian resident individual employee, who is not a person described in subsection 15(2), receives a loan from an arm's length corporate employer, that employee is not subject to the provisions of subsection 15(2) even though he or she subsequently uses the funds to acquire shares in that corporate employer.
Yours sincerely,
DirectorBusiness and General DivisionSpecialty Rulings DirectorateLegislative and Intergovernmental Affairs Branch
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