Dear Sirs:
This is in reply to your letter of May 31 1991 in which you asked us whether a certain loan would qualify as a "home relocation loan" as defined in Subsection 248(1) of the Income Tax Act (the Act).
24(1)
Our Comments
One of the requirements in the definition of "home relocation loan" (HRL) in subsection 248(1) of the Act is that a loan described therein must be made to an individual or his spouse. As a consequence of this requirement, it is our view that "a taxpayer" for the purposes of subsection 110(1.4) of the Act is limited to the individual or his spouse. Since B is not A's spouse for the purposes of that definition (i.e. a common law spouse is not a spouse for the purposes of that provision), subsection 110(1.4) would not apply to the transfer of the loan to B.
If a new loan were to be made by the Bank to B who used the loan to acquire the home from A such a loan could, depending on the circumstances satisfy the requirements in the definition of HRL.
If you are concerned with the tax consequences of an actual situation, you may consult with officials of your local District Taxation Office.
We hope that the foregoing comments are of assistance to you.
Yours truly,
for DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch