Benefit qua shareholder
2.3 Unless the particular facts establish otherwise, there is a general presumption that an employee-shareholder receives a benefit or an allowance in their capacity as a shareholder when the individual can significantly influence business policy. This presumption may not apply if:
- the benefit or allowance is available to all employees of the corporation; or
- all of the employees are shareholders or individuals related to a shareholder, and the benefit or allowance is comparable (in nature and amount) to benefits and allowances generally offered to non-shareholder employees of similar-sized businesses, who perform similar services and have similar responsibilities.
2.12 …[B]enefits that an employer provides to an individual who does not deal at arm’s length with an employee, such as the employee’s spouse, child, or sibling, are generally included in the employee’s income.
Measurement of benefit
2.14 …Lowe...confirmed that generally, the value of a benefit will be included in an employee’s income under paragraph 6(1)(a) where the employee or an individual not dealing at arm’s length with the employee:
- receives an economic advantage measurable in monetary terms; and
- is the primary beneficiary of the benefit.
2.20 Travel between an employee’s home, including a home office, and a regular place of employment…is generally personal travel. … However, if transportation between an employee’s home and a regular place of employment is provided by an employer for security reasons, or if public and private vehicles are not allowed or practical, then such travel is not considered personal. Where an employer requires an employee to proceed directly from home to a point of call (for example, a client’s office), return home from a point of call, or travel between two regular places of employment, such travel is employment travel. …
2.21 … An employee may have more than one regular place of employment if the employee regularly performs their employment duties at more than one work location.
Example 3 – Travel from home office
...The employee regularly works from home, but attends bi-weekly meetings at the head office. The head office is a regular place of employment for the employee. As noted..., travel between an employee’s home (including a home office) and a regular place of employment is personal travel.
Incidental v. primary benefit
2.23 ... McGoldrick...held..., “[w]here something is provided to an employee primarily for the benefit of the employer, it will not be a taxable benefit if any personal enjoyment is merely incidental to the business purpose ….”
2.24 ...[T]he following...may suggest...the employer is the primary beneficiary...:
- Does the employer have a business purpose for providing the benefit?
- Is the benefit required for the employee to perform the employment duties more effectively?
- Is the benefit required to fulfill a condition of employment?
- Does the employer have a moral or contractual obligation to provide the benefit....[then providing example of providing home security system for prosecutor at risk]
2.25 Where an employer requires an employee to take a trip for employment-related reasons, the employer is the primary beneficiary of the trip. ... However, where an employee receives a trip as an employment incentive or award, the employee is the primary beneficiary... . If the employee is required to perform employment duties during that trip, any benefit included in the employee’s income may be reduced for any actual employment-related activity.
Valuation of benefit
2.26 ...Spence...determined that the value of a benefit...is the fair market value of the benefit.
2.28 When an employee receives a discount on merchandise because of their employment [including from a third party]...the value of the benefit is equal to the fair market value of the merchandise purchased, less the amount paid by the employee. However, no amount is included in the employee’s income if the discount is also available to the general public or to specific public groups.
Example 9 – Supplier award
An employee is awarded a Caribbean cruise by her employer’s third-party supplier. ... Although there is no employer-employee relationship between the employee and the supplier, she received the trip because of her employment.
Benefits received in personal capacity
2.29 [A] benefit or an amount is generally received in the person’s capacity as an individual if it is...provided for humanitarian or philanthropic reasons [providing example of disaster relief].
Specific policies on benefits and allowances
2.68 [P]olicies can be found at Benefits and allowances, or in Guide T4130, and include: