Search - consideration

The CRA is of the view that the word "consideration" in the phrase "fair market value of any consideration … received by the donee for the disposition … of the security" in paragraph 118.1(13)(c) must be given the broad meaning generally accepted in the jurisprudence. ... Consequently, the CRA is of the view that for the purposes of paragraph 118.1(13)(c), the consideration received by the qualified donee for the disposition of a NQS may include the portion of such consideration that is a deemed dividend received by the qualified donee pursuant to subsection 84(3) on a redemption of shares. Words and Phrases consideration ...

24 January 2019 External T.I. 2018-0773301E5- Paragraph 69(1)(c) and Nominal Consideration-- summary under Paragraph 69(1)(c) Summary Under Tax Topics- Income Tax Act- Section 69- Subsection 69(1)- Paragraph 69(1)(c) a transfer structured as a sales agreement for nominal consideration may qualify as a gift $1 consideration is specified in the legal documentation for a gift of property by a parent to a child solely to ensure the agreement is legally binding. Would s. 69(1)(c) apply, notwithstanding that nominal consideration of $1 would be paid? ... For example, if the agreement governing the transfer provides for consideration of $1 merely to ensure that the agreement is legally binding, the CRA may consider the transfer to be a gift. … If it is determined that the transfer of property was a sale for inadequate consideration rather than a gift, paragraph 69(1)(c) would not apply. ...

13 October 1994 External T.I. 9425475- 7(1.5) APPLICATION WHIT NON SHARE CONSIDERATION-- summary under Subsection 7(1.5) Summary Under Tax Topics- Income Tax Act- Section 7- Subsection 7(1.5) RC intimated that it would be prepared to apply its position that s. 85.1(1) applies to some transfers where non-share consideration also is received, to s. 7(1.5). ...

13 May 2014 External T.I. 2014-0525491E5- Emigration to Poland- Various tax considerations-- summary under Article 18 Summary Under Tax Topics- Treaties- Income Tax Conventions- Article 18 lump sum RRSP commutation not eligible for reduced withholding under Polish Treaty As "pension" was not defined in the Canada-Poland Treaty, s. 5(a) of the Income Tax Conventions Interpretation Act applied, so that all of the RPP, RRSP, OAS, CPP and QPP payments made to the Taxpayer (a former Canadian who became a Polish resident) were to be considered "pensions" for the purposes of the Treaty. ...

A conventional pipeline transaction will be implemented respecting the the remaining Class B shares, as well as the Class C shares, of A Co now held by the Estate: The Estate will transfer the shares to its newly-incorporated subsidiary ("Newco") in consideration for a note equal to the ACB of the transferred shares minus $X, and for additional Class A shares, electing under s. 85(1). ... U.S. tax considerations. A Co is a PFIC. The manner of Child 2's removal as an A Co shareholder ensures that he can receive the distribution from A Co "as a capital gain" for Code purposes and avoid the complications of being a PFIC shareholder. ...

S. 87(4) requires that such shares be the only consideration received by the Target shareholders “on the amalgamation.” ...

Although the cash received for each share tendered was specified in the offer, the fraction of the total consideration that it represented could not be determined until the date of the exchange because the total exchange consideration was dependent upon the average trading price of Foreign Purchaser’s shares immediately before the exchange. Except respecting the treatment of the cash consideration, all the s. 85.1(5) conditions were satisfied. ... CRA quoted S4-F5-C: Subsection 85.1(1) may apply where a vendor receives newly issued shares of the purchaser and non-share consideration for each exchanged share. ...

Although the agreement does not attribute any amount of consideration to the acquisition of the purchase option, pursuant to section 68, the sum of the part of the periodic payment amounts of consideration that can reasonably be considered to relate to the acquisition of the purchase option will be deemed to be the proceeds of disposition of that option to the Lessor and the amount paid to acquire that option by the Lessee. The sum of the other part of the periodic payment amounts of the consideration will therefore relate to the amount paid by the Lessee for the use of the property, which may be considered to be in the nature of rent. Aco will be able to deduct the portion of the periodic amounts of the consideration relating to the use of the property …. ...

11 April 2005 External T.I. 2005-0112321E5 F- Price adjustment clause-- summary under Subsection 51(2) Summary Under Tax Topics- Income Tax Act- Section 51- Subsection 51(2) CRA may accept a price adjustment clause adjusting of share consideration on s. 51 exchange if genuine attempt to establish FMV and issue of intervening share cancellation is addressed An estate freeze entailed the exchange by Mr. A of his common shares of Opco by way of purchase for cancellation for Class A preferred shares with a redemption value of $1 million, followed by a common share subscription by his two adult children for nominal consideration. ... A as consideration, Mr. A and Opco would agree to exchange the those Class A preferred shares for an equal number of Class B preferred shares. ...

(Tax Window, No. 18, p. 2, ¶1831)-- summary under Paragraph 85(1)(b) Summary Under Tax Topics- Income Tax Act- Section 85- Subsection 85(1)- Paragraph 85(1)(b) Where, in connection with the transfer by Opco to its parent, Holdco, of property subject to debt in excess of the property's ACB, Holdco first assumes the excess debt in consideration for a promissory note of Opco, and then Holdco surrenders that promissory note to Opco in consideration for the redemption of preference shares issued by Holdco to Opco on the transfer, s. 85(1)(b) will not apply to alter the agreed amount (being the property's ACB), i.e., the allocation of the assumed debt as consideration for the promissory note of Opco rather than as consideration for the transfer of the property will be respected. ...