Corporate tax
Shareholder loans at year end: avoiding an unexpected tax bill
Quick answer
A loan from a corporation to a shareholder is generally included in income unless it is repaid within one year after the end of the corporation's tax year in which it was made, subject to the applicable rules and exceptions.
Key takeaways
- Track shareholder loan balances continuously.
- Repayment timing matters.
- Talk to your CPA before clearing the balance with compensation or dividends.
Why the shareholder loan account matters
The account captures amounts advanced between the corporation and the shareholder. It should be reviewed regularly, not just when the financial statements are prepared.
Plan the clearing option
Repayment, salary, dividends and reimbursement of documented business expenses have different consequences. Seek advice before acting.
Build it into your year end checklist
A current loan account gives the CPA time to identify options before a deadline creates unnecessary pressure.
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T2 corporate tax, Calgary
GDPC is a Calgary CPA firm in practice since 2009. Let’s connect this question to the financial work that comes next for your corporation.
Explore the serviceSources & review
Reviewed by Gurjinder Dhillon, CPA, CGA, MBA. Check current primary guidance before acting on filing dates or tax questions: Canada Revenue Agency (opens in new tab) and WCB Alberta (opens in new tab).
Last updated November 23, 2026