See Also
R. v. Golini, 2016 TCC 174
The sole individual shareholder (“Paul Sr.”) of an Ontario corporation (“Holdco”) received a loan from an accommodation party...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 15 - Subsection 15(1) | a loan to a shareholder with recourse limited to an asset pledged by the corporation was a shareholder benefit | 589 |
| Tax Topics - General Concepts - Sham | sham doctrine did not apply to a "minor pretence" | 338 |
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) | interest deduction on limited recourse loan | 305 |
| Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) | use of corporate asset to create PUC was abuse of s. 84(1) | 250 |
Aylward v. R., 97 DTC 1097, [1997] 2 CTC 2748 (TCC)
The issuance to the taxpayer of shares having a paid-up capital of $350,000 did not give rise to a deemed dividend because they were in respect of...
Administrative Policy
2018 Ruling 2018-0780201R3 - Post-mortem pipeline
CRA provided rulings for a pipeline transaction in which the estate with a resident beneficiary sells a company (Opco) with apparently a real...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 84 - Subsection 84(2) | hybrid post-mortem 164(6)/pipeline transactions with 10% per quarter redemptions following 12 months | 396 |
2015 Ruling 2015-0584151R3 - Conversion of Contributed Surplus to PUC
Background.
The central management and control of ACo, which was originally incorporated under the Country A Corporate Act, shifted to Canada. In...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 89 - Subsection 89(1) - Paid-Up Capital | corporate PUC and capital surplus flowed through on a cross-border continuance | 108 |
2014 Ruling 2014-0533601R3 - Spin-off butterfly - subsection 55(2)
A spin-off butterfly reorganization by DC includes a preliminary step for distributing a small portion of DC's retained business from its...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 186 - Subsection 186(1) | matching of PUC of cross-shareholdings to match Part IV tax | 152 |
| Tax Topics - Income Tax Act - Section 55 - Subsection 55(1) - Distribution | spin-off by CCPC under Plan of Arrangement of two businesses/matching of PUC of cross-shareholdings to match Part IV tax/leased property as business property | 978 |
| Tax Topics - Income Tax Act - Section 86 - Subsection 86(1) | new common shares distinct on basis of right to interim financials | 97 |
S4-F3-C1 - Price Adjustment Clauses
Where the consideration received on the transfer of property to which a price adjustment clause that meets the conditions listed in ¶1.5 is in...
17 February 2003 External T.I. 2002-0176455 - Amount Added to Paid-up Capital of Shares
Aco holds 30 common shares of Opco (30% of the common shares) having an ACB and PUC of $30 and an FMV of $300 (the net fair market value of all...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 85.1 - Subsection 85.1(2.1) | 105 |
12 August 1994 External T.I. 9325945 - PAID-UP CAPITAL
Where an individual transfers his 5% shareholding in Opco, having a paid-up capital and ACB of $100,000 and a fair market value of $1 million, to...
23 September 1992 T.I. (Tax Window, No. 24, p. 1, ¶2190)
Where preferred shares having a low paid-up capital are transferred by the shareholder to the corporation in exchange for common shares having a...
92 C.R. - Q.27
Where convertible preference shares having a high stated capital and a low paid-up capital are converted into common shares having both a stated...
1992 June Hong Kong Seminar, Q. B.8 (May 1993 Access Letter, p. 226)
S.84(9) applies for purposes of s. 94(1).
1992 A.P.F.F. Annual Conference, Q. 1 (January - February 1993 Access Letter, p. 49)
Where an individual exchanges all the outstanding common shares of Opco, having a paid-up capital of $500,000 and a fair market value of $600,000,...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 85 - Subsection 85(2.1) | 73 |
28 August 1991 Memorandum (Tax Window, No. 8, p. 6, ¶1435)
Where preferred shares having a stated capital of $2 million and a paid-up capital of $1 are converted into common shares having a stated capital...
81 C.R. - Q.6
Where consequences of receiving a s. 84(1) dividend as a result of the paid-up capital of shares issued on a s. 85(1) roll exceeding the fair...
Articles
Brussa, "Capital Reorganizations", 1991 Conference Report, c. 16.
Paragraph 84(1)(b)
Administrative Policy
2021 Ruling 2021-0911211R3 - Foreign Takeover
A Canadian corporation contributed its shares of a subsidiary (Merger Sub1) to a Canadian subsidiary as a contribution of capital. It had...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 54 - Adjusted Cost Base | shares issued to a Canadian parent in consideration for it issuing shares on a Delaware merger had a cost equal to such shares’ FMV/ shares transferred on absorptive merger at FMV | 903 |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Disposition - Paragraph (k) - Subparagraph (k)(ii) | deposit of shares to voting trust arrangement was not a disposition | 40 |
| Tax Topics - General Concepts - Payment & Receipt | borrowing and payment of funds pursuant to an internal payment direction agreement | 49 |
| Tax Topics - Income Tax Act - Section 53 - Subsection 53(1) - Paragraph 53(1)(c) | full cost to sub of shares contributed to it | 289 |
7 October 2016 APFF Roundtable Q. 21, 2016-0655901C6 F - Section 7 and bonus paid in share
After noting that it considers that where a Canadian-controlled private corporation has agreed in writing “to award a bonus based on the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 7 - Subsection 7(3) - Paragraph 7(3)(a) | s. 7 can govern bonuses paid in shares where discretion ceases prior to the issuance | 266 |
| Tax Topics - Income Tax Act - Section 7 - Subsection 7(1.1) | 7(1.1) applicable to non-discretionary bonus payable in shares | 178 |
Paragraph 84(1)(c)
Articles
Doron Barkai, Alexander Demner, "Dealing with New Subsection 55(2): Issues and Strategies", 2016 Conference Report (Canadian Tax Foundation), 6:1–56
PUC-streaming under s. 84(1)(c) (pp. 6:45-46)
…CRA has not made any specific comments regarding the potential application of new section 55 to...
Paragraph 84(1)(c.3)
Administrative Policy
30 October 2002 External T.I. 2002-0146655 - Meaning of Contributed Surplus
Xco, a taxable Canadian corporation and private corporation, reduced its stated capital account and its paid-up capital in respect of a class of...