Words and Phrases - "benefit"

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24 April 2012 Internal T.I. 2011-0400671I7 F - Honoraires professionnels

In finding that the payment by a corporation of fees that had been incurred by its individual shareholder and that did not qualify in accordance with IT-454, para. 3 as pre-incorporation expenses, the Directorate stated:

The term "benefit" in subsection 15(1) is broad enough to include the following:

(a) a payment to a shareholder by a corporation other than by virtue of a true business transaction;
(b) the appropriation of capital or other property of a corporation in any manner whatsoever to a shareholder or to for the benefit of a shareholder;
(c) any other benefit that a corporation confers on a shareholder.

To the extent that the amount of fees paid by Corporation D must be included in computing Mr. B's income, we do not believe that such fees can be deducted by Corporation D in computing its income.

Words and Phrases
benefit
Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Start-Up and Liquidation Costs fees incurred by individual before intention to form a corp did not qualify as pre-incorporation expenses 447
Tax Topics - Income Tax Act - Section 40 - Subsection 40(1) - Paragraph 40(1)(a) - Subparagraph 40(1)(a)(i) tax planning fees paid to joint counsel qualified as a disposition expense 131

Attorney General of Canada v. Hoefele, 95 DTC 5602 (FCA)

interest rate subsidy did not increase net worth

After a national real estate company advised that a Toronto home cost 155% of a similar home in Calgary, Petro-Canada agreed to pay a time-limited interest subsidy to employees that it required to relocate from Calgary to Toronto based on the increase (up to 55%) in the principal of their house mortgages.

Before going on to find that such subsidies were not a "benefit" because there was no resulting increase in the employees' equity in their homes, Linden J.A. stated (at p. 5604) that "a receipt which does not increase net worth is not a benefit and is not taxable".

Words and Phrases
benefit
Locations of other summaries Wordcount
Tax Topics - General Concepts - Tax Avoidance form matters 76
Tax Topics - Income Tax Act - Section 80.4 - Subsection 80.4(1) new mortgage debt of relocated employees 121