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.
XXXXXXXXXX
Attention: XXXXXXXXXX
Dear Sirs:
RE: Rent Free Periods
This is in reply to your letter of May 17, 1993, concerning the tax treatment to a lessee during a rent-free period in a lease.
The Department has reviewed this issue and has concluded that where a lease agreement provides for a rent-free period and the lessee is under no legal obligation to pay rent in respect of that period, no outlay or expense is incurred. Any imputed rent expense during the rent-free period would therefor be disallowed pursuant to paragraph 18(1)(a) of the Income Tax Act.
We trust our comments will be of assistance to you.
Yours truly,
for DirectorFinancial Industries DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch
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© Her Majesty the Queen in Right of Canada, 1993
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© Sa Majesté la Reine du Chef du Canada, 1993
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