@cheryl
This is similar to another thread:
However, it’s not clear what is going on (mostly related to point 2):
- What do you mean by “convert property”? There are many different ways to interpret this:
- from an unusable state to a usable state
- from farmland to a non-agricultural commercial enterprise (or vice versa)
- from a farmhouse to a residential rental property (or vice versa)
- from residential to commercial zoning (or vice versa)
- from a passive asset to an active asset (or vice-versa)
- How is this “family” related to the CCPC? Are they tenants? Employees? Squatters? Even if some of the family members are shareholders, I’m not sure what you mean by “staying at the property” - are they working there during the day or LIVING there? Is there a HOUSE on the property, which could be considered a residence?
- If there could be a shareholder benefit per ITA 15(1), I would advise my client how to AVOID it. I’m not CRA, so wouldn’t be doing any “assessing” of it.
- Who is “they” when you refer to the “intention of renting”? If the CCPC owns the property, it is the CCPC’s management who decide whether or not to rent the property, and to whom it may be rented. Whether or not management has decided to use this asset for rental revenue has no bearing on whether a shareholder benefit exists.
Hope that helps!