In 2012-0464411I7, the Aggressive Tax Planning (ATP) section of the CRA’s Toronto North Tax Services Office was proposing (among other things) to assess a taxable benefit on the shareholder of one group company (Borrower Co) that had borrowed funds from another group company (Lender Co) on an interest-free basis. The ATP section was proposing to assess the entire amount of the loan as a taxable benefit to the shareholder under s. 15(1) or s. 246(1). The Rulings Division (in Ottawa) rejected the proposed assessment on the basis that a loan is not a “payment or transfer of property” (s. 56(2)), and further, that the shareholder of Borrower Co was not a shareholder of Lender Co either directly or indirectly (s. 15(1) and s. 246(1)). In addition, the Rulings Division noted there was no suggestion that the making of the loan resulted in an “absolute reduction” in the value of Lender Co, such that value was “permanently shifted” from Lender Co to Borrower Co.