When Insurance Premiums Lead to Unwanted Shareholder Benefits

Insights from the FCA's Decision in Management M.-A. Roy Inc. v. HMK
When Insurance Premiums Lead to Unwanted Shareholder Benefits

Management M.-A. Roy Inc. v. HMK (“Gestion Roy”) centers around whether an Opco’s decision to pay insurance premiums, with two Holdcos as the policy owners, gives rise to a shareholder benefit under subsection 15(1) of the Income Tax Act. If such a benefit exists, then subsection 15(1) warrants the inclusion of its value in the shareholder’s income.

The Canada Revenue Agency included the value of the benefit in the taxpayer’s income based on subsection 15(1) of the ITA. However, the taxpayer disagreed with this reassessment and decided to appeal the decision to the Tax Court of Canada. The TCC dismissed the taxpayer’s appeal, but the taxpayer still disagrees with the TCC’s ruling and has now appealed the decision to the Federal Court of Appeal.

Right now, we are waiting for the FCA to share its decision.

When the FCA releases its decision, Peter and James will complete their summary and share the critical insights on this page.

Stay tuned for the upcoming article by Peter and James!


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