Search - consideration

Pursuant to the agreement between Forco 2, Canadian TC and Foreign DC for the “First Three-Party Share Exchange,” Forco 2 will transfer the Canadian DC Special Shares to Canadian TC and it will be further agreed that Canadian TC will acquire such Canadian DC Special Shares in consideration for issuing Canadian TC Common Shares to Foreign DC; Forco 2 will transfer all of the Canadian DC Special Shares to Canadian TC in consideration for the issuance in c; and Foreign DC will issue units to Forco 2 in consideration for the issuance in a. (There is no Canadian tax reason for transferring the Canadian DC Special Shares to Canadian TC by way of the First Three-Party Share Exchange rather than in consideration for Canadian TC Common Shares.) ... Under the “Second Three-Party Share Exchange,” Foreign Pubco will transfer the Foreign DC units to Foreign TC in the following manner: Foreign TC will agree to pay to acquire Foreign DC units from Foreign Pubco in consideration for issuing Foreign TC shares to New LLC; Foreign Pubco will agree to transfer the Foreign DC units to Foreign TC in consideration for being issued New LLC units; and New LLC will agree to issue units to Foreign Pubco as the purchase price for the Foreign TC Common Shares issued to it. ...

8 October 2010 Roundtable, 2010-0373231C6 F- Application of subsections 51(1) and 85(1)-- summary under Subsection 85(1) Summary Under Tax Topics- Income Tax Act- Section 85- Subsection 85(1) share consideration need not be immediately issuable In confirming its position in IT-291R3, para. 35, CRA stated: The Dale case concerned a transferee corporation that had issued shares that were not authorized in its articles of incorporation. ... Bowman J. ruled that the term "consideration that includes shares", which appears in section 85, does not mean that the shares must be issued at the same time as the property transfer or in the same taxation year.... ...

Gain-- summary under Subsection 84(3) Summary Under Tax Topics- Income Tax Act- Section 84- Subsection 84(3) sale of stock option shares to affiliate of employer Where employees of Opco (who as a group, own 14% of its issued common shares) are terminated, they are required to sell their Opco common shares for cash consideration to a new corporation ("Newco") equal to the shares' fair market value; and Newco finances the purchase with a non-interest bearing loan from Opco and, shortly after the purchase, transfers the common shares to Opco for fair market value consideration. ...

In finding that the rule in s. 153(3) did not apply, CRA stated: …the crude oil supplied by [Company B] does not serve as consideration for the supplies of crude oil by [Company A] to [Company B]….[T] here is a difference between property supplied as consideration for other property, and property which is supplied for which a credit is given for use against future supplies. ...

21 July 2014 Ruling 142194 [electricity not a product of water]-- summary under Subsection 162(2) Summary Under Tax Topics- Excise Tax Act- Section 162- Subsection 162(2) electricity not a product of water As part consideration for its services to Company A, an engineering firm receives from Company A a royalty equal to a percentage of the gross proceeds from the electricity generated by the contemplated hydroelectric plant. After ruling that s. 162(2)(c) does not apply to the supply (so that the royalty payments are consideration for a taxable supply of an engineering study), CRA stated: Payments made to the Engineer pursuant to the Agreement are not computed by reference to the production from a natural resource as required by this paragraph. ...

Preliminarily to a Plan of Arrangement (referred to in Steps 4 to 7 of the above diagram and summarized under s. 80(1)- forgiven amount): Aco will transfer the Bco Notes (having an adjusted cost base equal to their principal) to a newly-incorporated CBCA corporation (Newco1) in consideration for the issuance of Newco1 common shares Aco will transfer its Newco1 common shares to Bco in consideration for the issuance of a nominal number of Bco common shares the paid-up capital of the Newco1 common shares will be reduced Newco1 will be wound-up into Bco, with Bco making a s. 80.01(4) election Rulings: ss. 40(2)(e.1) and 53(1)(f.1) will apply to the dispositions of the Bco Notes to Newco1, so that their ACB is preserved the extinguishment of the Bco Notes on the winding-up of Newco1 will not give rise to a forgiven amount (per s. 80.01(4)) ...

CRA stated: [I]n a typical petroleum and natural gas lease, the lessor grants the oil and gas company the exclusive right to explore for, drill for and take the petroleum, natural gas and related hydrocarbons that occur on or under a particular parcel of land in return for consideration consisting of lump sum rental payments and bonus payments. Since a CRP [Canadian resource property] is defined as including any right, licence or privilege to explore for, drill for or take petroleum, natural gas or related hydrocarbons in Canada, we believe that the consideration received by the lessor for entering into such a lease should be treated as proceeds of disposition of a CRP. ...

(j) of the definition in s. 128.1(10) of "excluded right or interest", that phrase includes an interest in a personal trust resident in Canada that was never acquired for consideration and did not arise as a result of a transfer of property to the trust by that individual that would be a qualifying disposition (if subsection 107.4(1) were read without ss. (h) and (i)); and further noted that s. 108(7) provides, inter alia, that for these purposes a person can contribute to the trust without failing the acquisition for consideration prohibition. ...

23 May 2013 External T.I. 2012-0472101E5 F- Emphytéose- disposition de terrain-- summary under Proceeds of Disposition Summary Under Tax Topics- Income Tax Act- Section 54- Proceeds of Disposition building erected on land was the consideration for the emphyteutic grant A corporation ("Corp. ... Consequently, when City granted the right of emphyteusis to Corp., this seems to be the disposition of a property for which the consideration- the improvements made to the land- is required to be provided to the owner at the end of the emphyteusis. ...

Consideration to USCo includes a fixed monthly fee, a percentage of gross receipts, and a "Procurement License Fee" ("PLF"). ... Regarding s. 212(1)(d)(v), CRA stated: If [as CRA contends] the PLF is characterized as consideration for the Franchise Rights, it would be difficult to conclude that any portion of the PLF would fit within the wording of this subparagraph because the PLF is dependent upon the volume or the price of the products and equipment purchased by Canco, not the degree to which Canco uses or has production (i.e., sales or profits) from the Franchise Rights. ...