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.
Dear Sirs:
Re: Subsection 6(9) and 80.4(1)
This is in reply to your letter dated May 8, 1991 wherein you requested our technical interpretation as to whether an employee is considered to have received a benefit by virtue of subsections 6(9) and 80.4(1) of the Income Tax Act (the "Act") in light of the recent court decisions of R. Orrin J. Splane (90 DTC 6442) and Vincent Lao (91 DTC 330). The facts in your particular situation are as follows:
Facts
1.
2. 24(1)
3.
4.
Our Comments
The facts in Splane and Lao are considerably different than those mentioned in your particular situation. In Splane, the taxpayer received from his employer a mortgage interest rate differential payment which compensated the taxpayer for the increase in mortgage rates as a result of his relocation. In Lao, the taxpayer received a lump sum amount in compensation for an increase in housing costs as a result of his relocation.
As the decisions in Splane and Lao are presently under appeal, the Department's current position is to continue to regard payments made in similar situations as giving rise to taxable benefits to employees.
In your situation, notwithstanding the Splane and Lao decisions, it is our view that the employee has received a benefit under subsection 6(9) of the Act deemed pursuant to subsection 80.4(1). The Act provides some relief under paragraph 110(1)(j) if the loan falls within the meaning of a "home relocation loan" as this term is defined in subsection 248(1) of the Act.
We trust our comments will be of assistance to you.
Yours truly,
for DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch
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© Her Majesty the Queen in Right of Canada, 1991
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© Sa Majesté la Reine du Chef du Canada, 1991
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