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.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
PRINCIPAL ISSUE:
Whether loan from 3rd party to employee is received because of the employment & subject to 80.4(1).
Position: Question of fact.
REASON:
Depends on involvement of employer in the transaction and other factors. Cannot be addressed on a technical interpretation basis.
980050
XXXXXXXXXX P. Spice
Attention: XXXXXXXXXX
February 5, 1998
Re: Mortgage Interest Subsidy Provided to Employee
This is in reply to your fax of January 5, 1998, concerning the criteria the Department applies to determine if an employee has received a loan "because of or as a consequence of ... the ... employment" as those words are used in subsection 80.4(1) of the Income Tax Act (the "Act").
The general criteria are described in paragraph 4 of Interpretation Bulletin IT-421R2 (“Benefits to Individuals, Corporations and Shareholders from Loans or Debt”). As stated therein, it is a question of fact whether an individual has received the loan because of the employment.
Consequently, we are unable to provide our views on whether subsection 80.4(1) of the Act would apply to an employee under the circumstances described in your letter since it is a determination based on the particular employee, employer and arrangement with the lending institution. Furthermore technical interpretations on the general application of a provision of the Act cannot be provided in respect of a proposed transaction as described in your letter.
We trust the foregoing explains our position.
Yours truly,
for Director
Financial Industries Division
Income Tax Rulings &
Interpretations Directorate
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 1998
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 1998
Email this Content