Income Tax Act — I-3.3 15
espect of an employee of the particular corporation or of another corporation that is related to the particular corporation, to enable or assist the employee to acquire from the particular corporation, or from another corporation related to the particular corporation, previously unissued fully paid shares of the capital stock of the particular corporation or the related corporation, as the case may be, to be held by the employee for the employee’s own benefit, or (d) in respect of an employee of the lender or creditor to enable or assist the employee to acquire a motor vehicle to be used by the employee in the performance of the duties of the employee’s office or employment, where (e) it is reasonable to conclude that the employee or the employee’s spouse or common-law partner received the loan, or became indebted, because of the employee’s employment and not because of any person’s share-holdings, and (f) at the time the loan was made or the debt was incurred, bona fide arrangements were made for repayment of the loan or debt within a reasonable time. When s. 15(2) not to apply — certain trusts (2.5) Subsection 15(2) does not apply to a loan made or a debt that arose in respect of a trust where (a) the lender or creditor is a private corporation; (b) the corporation is the settlor and sole beneficiary of the trust; (c) the sole purpose of the trust is to facilitate the purchase and sale of the shares of the corporation, or of another corporation related to the corporation, for an amount equal to their fair market value at the time of the purchase or sale, as the case may be, from or to the employees of the corporation or of the related corporation (other than employees who are specified employees of the corporation or of another corporation related to the corporation), as the case may be; and (d) at the time the loan was made or the debt incurred, bona fide arrangements were made for repayment of the loan or debt within a reasonable time. When s. 15(2) not to apply — employee ownership trusts (2.51) Subsection (2) does not apply to a loan made or a debt that arose in respect of a qualifying business transfer if (a) immediately following the qualifying business transfer, (i) the lender or creditor is a qualifying business, and (ii) the borrower is the employee ownership trust that controls the qualifying business described in subparagraph (i); (b) the sole purpose of the loan or the debt is to facilitate the qualifying business transfer; and (c) at the time the loan was made or the debt incurred, bona fide arrangements were made for repayment of the loan or debt within 15 years of the qualifying business transfer. When s. 15(2) not to apply — repayment within one year (2.6) Subsection 15(2) does not apply to a loan or an indebtedness repaid within one year after the end of the taxation year of the lender or creditor in which the loan was made or the indebtedness arose, where it is established, by subsequent events or otherwise, that the repayment was not part of a series of loans or other transactions and repayments. Employee of partnership (2.7) For the purpose of this section, an individual who is an employee of a partnership is deemed to be a specified employee of the partnership where the individual is a specified shareholder of one or more corporations that, in total, are entitled, directly or indirectly, to a share of any income or loss of the partnership, which share is not less than 10% of the income or loss. Interest or dividend on income bond or debenture (3) An amount paid as interest or a dividend by a corporation resident in Canada to a taxpayer in respect of an income bond or income debenture shall be deemed to have been paid by the corporation and received by the taxpayer as a dividend on a share of the capital stock of the corporation, unless the corporation is entitled to deduct the amount so paid in computing its income. Idem, where corporation not resident (4) An amount paid as interest or a dividend by a co