Loans – interest-free and low-interest

You may have to include in income any benefit arising from an interest-free or low-interest loan received, or debt incurred, by a person because of an office, employment, or shareholding.

The benefit is generally calculated as the amount of interest that the person would have paid on the loan or debt for the year at the prescribed rates, minus the amount of interest that they paid on the loan in the year or no later than 30 days after the end of the year.

Special rules apply to certain loans or debt and to home-relocation loans. For more information, see Exceptions and Home-relocation loans.

Forms and publications

• Income Tax Folio S2-F3-C2, Benefits and Allowances Received from Employment