Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Dear Sirs:
This is in reply to your request for the Department's position on the application of subsections 15(1), 55(1), 56(2), 245(2), 247(1) and paragraph 85(1)(e.2) of the Act (the "benefit provisions") in certain situations.
Where property is transferred from one corporation (the "transferor") to another corporation (the "purchaser") the consideration that should normally be received by the transferor is the fair market value of the property transferred. If the shareholders of the transferor and the purchaser are the same persons and their shareholdings in each of the companies are identical the Department may, in certain circumstances, not apply the benefit provisions when the transferor receives consideration having a fair market value less than the fair market value of the property transferred. The Department will not accept a situation where the consideration received by the transferor is less than the cost amount of the assets transferred and may, in certain situations, insist on consideration in excess of the cost amount of the assets transferred. The minimum amount of consideration that would be acceptable to the Department in a particular situation cannot be determined without having all the relevant facts. Therefore, you may wish to seek an advance income tax ruling in such a situation.
We trust this information will be of assistance to you.
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© Her Majesty the Queen in Right of Canada, 1986
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 1986
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