In responding to a question on the application of s. 186(1) to inputs used by a holding company partially for making supplies of administrative services for consideration to related corporations whose debt or shares are held by it, CRA stated:
[I]f a holding company acquires or imports property or a service or brings it into a participating province for consumption or use partially in relation to the shares or indebtedness of a related company and partially in relation to other activities of the holding company, the costs should be allocated pursuant to the rules in the ETA governing ITC eligibility. The types of expenses that would be eligible for ITCs would be generally limited to share and debt acquisition, holding and disposing of shares and debt, and dividend and interest receipts. ...
If the holding company makes free supplies of administrative services, subsection 141.01(4) of the ETA would deem the holding company's inputs that it used or consumed in making those supplies, for purposes of subsection 141.01(2) of the ETA, to have been acquired, imported or brought into a participating province in order to facilitate the endeavour of the operating company. Consequently, the holding company would still be eligible to claim ITCs on such costs, to the extent that the operating company is engaged in commercial activities.