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.
PRINCIPAL ISSUE
Whether a premium or bonus paid by a bank's subsidiary mortgage corporation upon the early redemption of certain of its notes (issued to finance the acquisition of a mortgage portfolio) will be deductible under section 9 (pursuant to the position set out in paragraph 25 of IT-114 for money lenders).
POSITION TAKEN
New subsection 18(9.1), which is of retroactive effect, now governs, among other things, the treatment of bonuses or penalties paid on the early redemption of debt obligations (to the extent the bonus or penalty relates to, and does not exceed, interest on the debt obligation that would have been paid/payable in the future were it not for the early repayment).
The ruling request was withdrawn.
NOTE Subsection 18(9.1) appears to supersede the exceptions made for money lenders in para. 25 (and possibly 22) of IT-114.
The provision also appears to supersede published ruling ATR 20.
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