Upon being assessed for Part XIII tax, the taxpayer made a claim against the taxpayer’s accountant, which the insurer agreed to pay but on the basis that it would be subrogated to any amounts paid to the taxpayer if the assessment was reversed. When this occurred, the amount paid by CCRA to the taxpayer included interest.
CCRA considered that by virtue of the subrogation, this interest was income to the insurer rather than to the taxpayer.