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.
923490
XXXXXXXXXX R.B. Day
(613) 957-2136
January 14, 1993
Dear XXXXXXXXXX
We are writing in reply to your letter of November 17, 1992, wherein you requested confirmation of your opinion that a mortgage interest subsidy, paid in lieu of salary, would not be considered to be employment income and that subsections 6(9) and 80.4(1) of the Income Tax Act (the Act) would apply in the circumstances.
Our understanding of the situation set out in your letter is as follows:
XXXXXXXXXX
XXXXXXXXXX
OUR COMMENTS Whether or not a loan, received by an employee from someone other that the employer, would be considered to have been received "by virtue of the office or employment" such that the interest benefit would be included in a recipient's income under subsection 6(9) of the Act rather than subsection 5(1) or paragraph 6(1)(a) of the Act, would involve a finding of fact that can only be determined by reviewing the relevant facts and documentation in each particular case (See paragraph 4 of IT-421R2).
Since the employee, in the above scenario, has the option to forego a salary increase in favour of the interest rate subsidy, it would appear that the interest rate subsidy may be part of an all-inclusive employment benefit package that should be included in the recipient's income pursuant to subsection 5(1) or 6(1)(a) of the Act. As a consequence, we are unable to confirm that subsections 80.4(1) and 6(9) of the Act would apply in this scenario.
We trust our comments will be of assistance to you.
Yours truly,
J.A. Szeszycki
for Director
Business and General Division
Rulings Directorate
Legislative and Intergovernmental
Affairs Branch
- c. c. Source Deductions Division
Assessment of Returns Directorate
Client Assistance Directorate
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© His Majesty the King in Right of Canada, 1993
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© Sa Majesté le Roi du Chef du Canada, 1993
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