R. Nanner (613) 957-8960
OCT 16 1986
Dear Sirs:
Re: Deemed Interest Deduction - "Home Relocation Loans"
This is in response to your letter dated August 28, 1986 wherein you requested our opinion on the application of subsection 80.4(1) and paragraph 110(1)(j) of the Income Tax Act ("Act") in the following situation.
1. XXXX (the Bank) will, as part of its personnel policy, under certain circumstances and within defined limits, make low-interest loans to employees to assist them in the acquisition of a new home at a new work location as a result of a bank initiated transfer.
2. In circumstances where both a husband and wife are employed by the Bank, each may qualify for such a loan by virtue of his/her employment with the Bank.
With respect to paragraph (d) of the definition of "home relocation loan" in subsection 248(1) of the Act it is our opinion that each employee/spouse may designate his/her loan notwithstanding that only one dwelling would be acquired. The provisions of subsection 80.4(1) and paragraph 110(1)(j) of the Act would apply to each employee/spouse with respect to his/her particular loan.
We hope our comments are of assistance to you.
Yours truly,
F. Lee Workman
for Director Financial Industries Division Rulings Directorate Legislative and Intergovernmental Affairs Branch