Personal use of corporate assets - Taxable benefit could be reduced where asset was financed by interest-free loan from shareholder.

USE OF CORPORATE ASSETS – IMPACT OF SHAREHOLDER LOANS

In an October 5, 2018 French Technical Interpretation (2018-0768851C6, Dagenais, Anne), CRA confirmed their position that a taxable benefit for personal use of corporate assets could be reduced where the asset was financed by interest-free loans from the shareholder (Paragraph 11 of Interpretation Bulletin IT-432R2). CRA opined that the same concept could apply to the computation of a taxable benefit arising from the personal use of a corporate aircraft. CRA finally noted that the principle, as set out in the Youngman (Federal Court Trial Division, November 5, 1986, 86 DTC 6584) case, must be respected.

For further information see Video Tax News Monthly Tax Update Newsletter, Issue No. 449.