Subsection 80.4(1) - Loans
Cases
Attorney General of Canada v. Hoefele, 95 DTC 5602, [1996] 1 CTC 131 (FCA)
Employees of Petro-Canada who were required to relocate from Calgary to Toronto had a declining percentage of their increased interest costs...
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|---|---|---|
| Tax Topics - General Concepts - Tax Avoidance | form matters | 82 |
| Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(a) | interest rate subsidy did not increase net worth | 102 |
See Also
Wolf v. MNR, 92 DTC 1858, [1992] 2 CTC 2231 (TCC)
The taxpayer held all the shares of Holdco and preference shares of the subsidiary of Holdco ("Ottawa"). Amounts advanced by Ottawa to the...
Fingold v. MNR, 92 DTC 2011, [1992] 2 CTC 2393 (TCC)
The taxpayers were unsuccessful in their submission that amounts paid to them without corporate formality by the corporation and which were...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(11) - Investment Contract | 85 |
Administrative Policy
CRA Webpage, “Loans and Employee Debt” 14 November 2023
…Non-taxable situation
If the loan is received or a debt is incurred because of employment, the interest benefit is not taxable if all of the...
26 April 2016 Internal T.I. 2015-0623571I7 - one-time salary transition payment
After stating that
A loan is generally defined as delivery by one party, and receipt by another party, of a sum of money upon agreement, express...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 5 - Subsection 5(1) | advance to employee is current s. 5 income | 239 |
| Tax Topics - Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(n) | deduction for repayment of transitional advance | 163 |
6 September 2013 External T.I. 2012-0463501E5 - Reduced Interest Rate Credit Cards
The correspondent asked about the tax treatment of an employee of a financial institution who receives a credit card bearing interest on credit...
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| Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(a) | 195 |
13 June 2012 Internal T.I. 2012-0448961I7 F - Paiements en trop faits par un employeur
An employee was on extended sick leave but nonetheless received remuneration from the payroll service, which was not informed of the leave. On the...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(n) | salary mistakenly paid after expiry of sick leave period and then repaid, treated as clerical error rather than s. 8(1)(n) adjustment | 288 |
2 March 2012 Internal T.I. 2011-0422811I7 - Loan received in capacity as an employee
The individual director of a private charitable foundation had submitted that a personal holding company had received a large loan from the...
13 January 1993 T.I. 922191 (November 1993 Access Letter, p. 500, ¶C76-077)
Where a loan is received by an employee of a corporation who owns all its shares, RC will consider that the loan was not contracted qua employee,...
13 January 1992 T.I. (Tax Window, No. 15, p. 20, ¶1695)
Although the s. 80.4 benefit associated with a joint loan generally is to be reported on a 50-50 basis, the basis of apportionment may differ from...
4 November 1991 Memorandum (Tax Window, No. 13, p. 11, ¶1585)
Where an employer goes bankrupt, benefits will continue to accrue to employees or former employees under s. 80.4 until the loan or debt in...
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| Tax Topics - Income Tax Act - Section 6 - Subsection 6(15) | 49 |
28 January 1991 T.I. (Tax Window, Prelim. No. 3, p. 21, ¶1110)
If the provisions of a housing loan relating to interest and amortization period are renegotiated, the five-year period will commence anew. On the...
IT-421R "Benefits to Individuals, Corporations and Shareholders from Loans or Debt"
Articles
Frankovic, "Interest Subsidies and Interest-Free Home Relocation Loans - No Taxable Benefits", Tax Topics, No. 1336, 16 October 1997, p. 1.
Dunbar, "Revenue Canada Establishes Policy on Loan-Related Benefits", Taxation of Executive Compensation and Retirement, June 1991, p. 451.
"Guidelines Are Established to Determine if a Loan is Made by Virtue of Employment", Taxation of Executive Compensation and Retirement, March 1990, p. 249.
"Low Interest Foreign Currency Loans May Trigger Taxable Benefit if a Downside Protection is Afforded by Employer", Taxation of Executive Compensation and Retirement, March 1990, p. 250.
Dewling, "Bridging Loan to Custodian Under Retirement Compensation Arrangement Is Not Subject to Interest Benefit Provisions", Taxation of Executive Compensation and Retirement, December 1989/January 1990
An interest-free bridging loan made by an employer to the trustee for a retirement compensation arrangement in order to help finance payments to...
Subsection 80.4(1.1) - Interpretation
Administrative Policy
24 February 2000 External T.I. 1999-0004805 - housing loans
In a situation involving an employer-requested move, the mere fact that the employee's move qualifies as an eligible relocation (as defined in s....
Subsection 80.4(2) - Idem [Interpretation]
Cases
Vine Estate v. The Queen, 89 DTC 5528, [1990] 1 CTC 18 (FCTD)
Appropriations made by the individual shareholder of a company could be considered to be a loan or debt incurred by the individual to the company,...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 15 - Subsection 15(1) | shareholder benefit where benefit on sister corp | 195 |
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Loss v. Loss | 122 |
Administrative Policy
5 May 2021 IFA Roundtable Q. 7, 2021-0887521C6 - Section 247, FAPI & Subsection 80.4(2)
A wholly-owned foreign subsidiary (FS) of CanCo uses funds generated from its operations to make a non-interest bearing loan to a foreign borrower...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 214 - Subsection 214(3) - Paragraph 214(3)(a) | non-interest-bearing loan from a CFA to a NR sister of the Canadian taxpayer generates a deemed dividend to the sister under ss. 80.4(2) and 214(3)(a) – plus FAPI to CFA | 348 |
| Tax Topics - Income Tax Act - Section 247 - New - Subsection 247(2) - Paragraph 247(2)(a) | a non-interest-bearing loan from a CFA to a NR sister of the Canadian taxpayer would generate imputed interest and FAPI to CFA, plus s. 80.4(2) application to sister | 199 |
16 August 2017 Internal T.I. 2015-0622751I7 - Part XIII Tax on Benefit to Non-resident
A foreign subsidiary of Canco (Opco) in turn wholly-owned a non-resident “Finco,” which made an interest-free loan to a non-resident sister of...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 15 - Subsection 15(9) | s. 15(9) applies to interest-free loan between two foreign affiliates | 285 |
| Tax Topics - Income Tax Act - Section 160 - Subsection 160(1) | use of s. 160 to collect s. 15(9) liability of indirect FA on dividends paid to Canco | 275 |
| Tax Topics - Income Tax Act - Section 215 - Subsection 215(1) | CFA liable for failure to "withhold" and remit Pt XIII tax on interest-free benefit on loan to NR sister of its Cdn grandparent | 127 |
| Tax Topics - Income Tax Act - Section 227.1 - Subsection 227.1(1) | s. 227.1 liability can extend to NR directors of a CFA | 176 |
| Tax Topics - Income Tax Act - Section 214 - Subsection 214(3) - Paragraph 214(3)(a) | benefit from interest free loan by CFA to Canco sister deemed to be a dividend subject to Pt XIII tax | 177 |
15 February 1994 External T.I. 9330465 F - Mortgage Interest Subsidies
Where mortgage interest subsidies are provided by an employer to employee/shareholders in their capacity of shareholders in respect of loans...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Income-Producing Purpose | 20 |
5 February 1993 T.I. (Tax Window, No. 28, p. 12, ¶2407)
S.80.4(2) does not apply to an interest-free loan made by a corporation to its parent company or a corporation connected to its parent where both...
October 1992 Central Region Rulings Directorate Tax Seminar, Q. H (May 1993 Access Letter, p. 230)
RC is not aware of any situations where the application of s. 80.4 to loans between non-residents should be considered to produce an inappropriate...
84 C.R. - Q.84
Trade accounts receivable from a non-resident parent which arose in the ordinary course of business which are subject to payment terms appropriate...
Subsection 80.4(3) - Where ss. (1) and (2) do not apply
Cases
Marchand v. R., 97 DTC 5272, [1997] 2 CTC 312 (FCA)
S.80.4(3) did not permit the market rate of interest on a portion of the taxpayer's loan from his employer to be blended with the rates paid by...
Administrative Policy
19 December 2001 Internal T.I. 2001-0109417 - TAXABLE BENEFITS
Where employees of Company A receive housing loans from the subsidiary of Company A at full interest rates, and Company A pays some of the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Effective Date | corporate revival has retroactive effect | 42 |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Disposition | 42 |
Paragraph 80.4(3)(b)
See Also
Quigley v. The Queen, 96 DTC 1057, [1996] 1 CTC 2378 (TCC)
The taxpayer argued that no imputed interest was required to be included in his income under s. 80.4(2) respecting shareholder advances because,...
Administrative Policy
25 February 2022 External T.I. 2020-0873761E5 F - Shareholder loan
On January 1, 2019, the Corporation (which had a calendar year) made the loan of $1,000, bearing interest at 5% per annum, to a shareholder (Mr....
| Locations of other summaries | Wordcount | |
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| Tax Topics - Income Tax Act - Section 15 - Subsection 15(2) | s. 15(2) applies separately to accrued and unpaid interest on shareholder loan | 181 |
| Tax Topics - Income Tax Act - Section 15 - Subsection 15(2.6) | s. 15(2) applies separately to accrued and unpaid interest on a shareholder loan, but s. 80.4(2) does not apply to such interest | 142 |
6 April 2018 External T.I. 2018-0738871E5 F - Shareholder
A shareholder (Taxpayer A) who received a loan from a corporation in 2017, did not repay the loan but wished to correct the situation at the...
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| Tax Topics - Income Tax Act - Section 15 - Subsection 15(2.6) | s. 15(2) held in suspense until time period passes/s. 80.4(2) inclusion until s. 15(2) inclusion reverses such inclusion | 193 |
7 June 2011 Internal T.I. 2011-0397921I7 F - Financement inter-sociétés
Canco makes a loan to a partnership that is wholly-owned by an indirect U.S. parent of Canco (the general partner) and another non-resident...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 15 - Subsection 15(2.1) | notwithstanding Gillette, a connected “person” may include a partnership | 172 |
| Tax Topics - Income Tax Act - Section 227 - Subsection 227(6.1) | refund of withholding tax on repayment of loan | 193 |
Subsection 80.4(4) - Interest on loans for home purchase or relocation
Administrative Policy
4 April 1995 External T.I. 9432435 - LOW INTEREST LOANS
Where a loan has been advanced in instalments, s. 80.4(4) will apply to each advance.