An amount, which is included in the income of an individual (X) under s. 15(2) is also subject in the individual’s hands to the tax on split income (TOSI) under s. 120.4(2) (TOSI), so that X is entitled to a deduction under s. 20(1)(ww) for the income subject to TOSI (being also equal to the s. 15(2) income inclusion).
In a subsequent taxation year, X repays the shareholder loan. CRA indicated that having claimed the s. 20(1)(ww) deduction would not preclude X from subsequently claiming the s. 20(1)(j) deduction when the loan was repaid – and indicated that this appeared to be the right policy result.