A public corporation acquires such works of art from foreign artists, for example, paintings that are used to decorate the boardroom in a director's office, where clients are not received. Are the works listed personal property? CRA responded:
Personal-use property includes property that is owned by a taxpayer and that is used or enjoyed primarily for the personal use or enjoyment of the taxpayer or a person related to the taxpayer pursuant to subsection 251(2).
We are of the view that a painting by a foreign artist that is owned by a public corporation and used exclusively to decorate a boardroom of that corporation is probably not personal-use property of that corporation … .
Our response would remain the same in the case of a painting located in the office of a director who does not receive clients in that office, although in certain circumstances, such as where the director is related to the public corporation and the painting is used primarily for the director's personal use or enjoyment, the painting would then be personal-use property that is listed personal property, as well as capital property that cannot be depreciated.