Loans received because of shareholdings

Loans received or debts incurred because of shareholdings may give rise to a taxable benefit when all of the following conditions are met:

If these conditions are met, the person or partnership (for example, a shareholder) is considered to receive a benefit in the tax year that is equal to:



A person may be an individual, a corporation, or a trust.

The calculation of the benefit is modified where one or more such loans are considered to have been made under a back-to-back shareholder loan arrangement. For more information on back-to-back shareholder loans, see pages 54 and 55 of Tax Measures: Supplementary Information.

Include the shareholder's benefit under code 117, "Other income," in the "Other information" area at the bottom of the T4A slip.

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