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26 July 2007 Ruling 26 July 2007 Ruling 63048-- summary under Financial Service Summary Under Tax Topics- Excise Tax Act- Section 123- Subsection 123(1)- Financial Service "fees" of vendor for servicing of sold mortgages part of consideration for single exempt supply Seller and Investor The Seller (a registrant which is resident in Canada) sells mortgages (the "Mortgage Loans"), which have already been fully advanced, to the Investor, which is a non-resident of Canada, has no permanent establishment in Canada and is not registered. ... Ruling The fees described in XX of the Agreement, payable by the Investor to the Seller, are consideration for a supply of a financial service. ...

The income derived by FA2 from payments received from FA1 in consideration for reinsuring the contracts of FA1 are stated in the question to be deemed to be income from an active business income under s. 95(2)(a)(ii), as is the income derived by FA3 from payments received from FA2 in consideration for reinsuring the risks assumed by FA2. ...

In ruling that no ITC was available, CRA stated: [S]ubsection 141.01(2) provides that a person is deemed to have acquired property or a service for consumption or use in commercial activities only to the extent that the property or service is acquired for the purpose of making taxable supplies for consideration (e.g., fees or charges) in the course of an endeavour (e.g., a business) of the person. … The settlement amount paid to you was compensatory. As the Law Firm's services were acquired by you for consumption or use otherwise than in making taxable supplies for consideration, the conditions of subsection 169(1) are not met. ...

In a given year, A transfers a portion of his shares of Aco, having a FMV of $100,000, to Aco in consideration for preferred shares of Aco having a redemption amount of $100,000 and a nominal PUC. ... In the same year, A transfers his $100,000 preferred shares of Aco to a Newco formed by him (Bco) in consideration for a demand promissory note of $100,000. ...

Before any advance is made under the Term Sheet, ACo, BCo and CCo enter into an Assignment Agreement pursuant to which CCo is designated as the lender under Term Sheet and for consideration of $XX paid by CCo to ACo, ACo assigns to CCo all of its right, title and interest in the Term Sheet. ... The Commitment Fee is consideration that was paid for this exempt supply. ...

In those circumstances, we are of the view that the determination of the existence of particular consideration for a property and the FMV of that consideration should be made in light of the particular facts of the situation under analysis. ...

CRA stated (TaxInterpretations translation): the shares in the capital of Newco issued to X and Y are deemed to have been property, immediately before their issuance, of a person who was not related to X and Y unless they were issued in consideration for other shares. Since the shares in the capital of Newco were issued in consideration for shares in the capital of ABC, we are of the view that the [24-month] holding test is satisfied. ...

In finding that dividends on the Class A shares paid to the Trust could not be attributed to Mother under s. 75(2), CRA stated: Since a corporation does not own its own shares prior to their issuance, it follows that the issuance of shares by a corporation to a trust for consideration equal to their FMV generally does not constitute a transfer of property to which subsection 75(2) could apply. According to … Kieboom …, subsection 75(2) could, however, apply where the shares are not subscribed for consideration equal to their fair market value. ...

11 June 2015 External T.I. 2014-0522641E5 F- Usufruct-- summary under Qualified Farm or Fishing Property Summary Under Tax Topics- Income Tax Act- 101-110- Section 110.6- Subsection 110.6(1)- Qualified Farm or Fishing Property termination of usufruct between father and son on farmland, which was a deemed trust, did not entail disposition of qualified farm property A father, who has carried on a farming business for a number of years, grants the bare ownership of the property for consideration to his son while retaining rights as the usufructuary. ... After noting that under s. 248(3)(a) "the property which is transferred to the son is an interest in a deemed trust," and indicating that "as the bare owner did not transfer, assign or dispose of any property to the deemed trust,…paragraph 108(7)(b) cannot apply to deem the beneficial interest of the bare owner to have been acquired for nil consideration," so that the deemed trust was not a personal trust, CRA stated: A right of a usfructuary, which is an interest in a trust…is not a QFP. … At the termination of the usufruct and, thus, of the deemed trust, there is a disposition of property held by the deemed trust in favour of the bare owner. ...

X 100 Class A shares for nominal consideration and also issues 100 discretionary dividend shares to Holdco. ... X of the new Class A shares of the capital stock of Opco was part of a series of transactions or events under which Holdco acquired discretionary dividend shares of capital stock of OPCO for consideration well below their FMV at the time of acquisition. ...