Search - consideration

Parentco1, 2 and 3 will transfer all of its shares of DC to Holdco on a s. 85(1) rollover basis in consideration for corresponding shares of Holdco – and similarly for Parentco2 and 3. ... Holdco will transfer all of its DC Class B Special shares to TC on a s. 85(1) rollover basis in consideration for common shares of TC. DC will transfer to TC all of its common shares of Landco1, Landco2 and Landco3 on a s. 85(1) rollover basis in consideration for Class A Special shares of TC. ...

Newco will redeem the shares so issued by it to DC in consideration for the issuance of a demand non-interest bearing note. ... DC will purchase for cancellation the Class B and Class X shares held in it by TC in consideration for its issuance of a demand non-interest bearing note. ... A will transfer her voting Class A shares of DC to Holdco A for cash consideration and the two corporations will be vertically amalgamated. ...

Proposed transactions In order to effect a multi-wing split-up net asset butterfly: Each Shareholder formed a transferee corporation (TC1 and TC2, respectively), and transfers the applicable portion of his or her shares of DC, being common shares, to TC1 or TC2, as the case may be, on a s. 85(1) rollover basis in consideration for Class A common shares of TC1 or TC2, respectively. DC then transfers cash or near-cash assets (“Cash”) to TC1 in consideration for the assumption of liabilities equal to the amount of such Cash, including an assumption of the portion of a shareholder advance owing by DC to Shareholder 1, and transfers Immovable 1 (being an investment-type property) to TC1 in consideration for the issuance by TC1 of Class E preferred shares and the assumption of mortgage debt and of the balance of the shareholder advance owing to Shareholder 1. ... The Class E preferred shares are then redeemed by DC in consideration for the issuance of demand promissory notes. ...

Estate B will transfer its shares of Opco to a newly incorporated corporation (Newco B) in consideration for common and preferred shares of Newco B, with a joint election under subsection 85(1) being filed. Newco B will purchase for cancellation up to 25% of the preferred shares in its capital held by Estate B in consideration for a promissory note (the Newco B Note). Estate B will assign the Newco B Note to Opco as consideration for the partial repayment for the tax-funding loan described above. ...

24 May 2011 External T.I. 2007-0246981E5- Subsection 212(1)-- summary under Paragraph 212(1)(d) Summary Under Tax Topics- Income Tax Act- Section 212- Subsection 212(1)- Paragraph 212(1)(d) In consideration for the "Non-Resident's" grant of the right to manufacture and sell a trademarked product to the "Resident," who manufactures the product in Canada and sells the product wholesale to customers throughout the world, the Resident agrees to pay the Non-Resident the greater of a percentage of amounts invoiced to customers from sales of the product and a pre-determined fixed minimum amount. In concuding that this consideration was a royalty on general principles, so that it ws not necessary to refernce s. 212(1)(d)(i), CRA stated: The payments in question are clearly in consideration for obtaining the rights to manufacture and sell the product and are based on a share of the profits that the Resident will realize from using such rights. ...

In finding that s. 232(2) did not apply to the supply of crude made by Company A to Company B, CRA stated: The reduction in consideration must relate to the original supply and may be made for any reason but must not depend on any action undertaken by the recipient or any supply made by the recipient. Furthermore, a reduction in consideration is not considered to have occurred if the goods are sold back to the original supplier. To be considered a reduction of consideration, it must be evident that the goods are being returned to the supplier rather than being sold to the supplier. ...

5 October 2012 APFF Roundtable Q. 13, 2012-0454181C6 F- Discretionary Dividend Shares-- summary under Subsection 15(1) Summary Under Tax Topics- Income Tax Act- Section 15- Subsection 15(1) discretionary dividend shares issued for nominal consideration Mr. ... X 100 Class A shares for nominal consideration and also issues 100 discretionary dividend shares to Holdco. ... CRA stated (TaxInterpretations translation): We are of the view that subsection 15(1) could apply to the extent that Holdco acquired the discretionary dividend shares of Opco for consideration less than their FMV. ...

14 March 2016 External T.I. 2016-0626781E5- Neuman Type Situation-- summary under Subsection 15(1) Summary Under Tax Topics- Income Tax Act- Section 15- Subsection 15(1) s. 15(1) might apply where spouse subscribes nominal consideration for Opco shares and receives a large discretionary dividend The only issued and outstanding share of Opco (which has retained earnings of $500,000) is 1 Class A common share, with a fair market value of $1,000,000 owned by Mr. ... A, for nominal consideration, 1 non-voting Class B preferred share, which is redeemable and retractable “for the fair market value for which it is issued” and entitled to discretionary dividends as and when declared. ... A as consideration for the share does not represent the fair market value of such share at the time of subscription. ...

Must the retained amount be included in the value of the consideration for the disposition of the stock options pursuant to s. 7(1)(b)? ... CRA responded (TI translation): [T]he term "value of the consideration for the disposition" under paragraph 7(1)(b) includes a receivable from the employer. Therefore…if the agreed price for the options includes the amount retained at the moment of the disposition of the stock options subject to a possible future reduction, the retained amount would be a part of the value of the consideration for the disposition under paragraph 7(1)(b). ...

23 March 2011 Internal T.I. 2010-0389081I7 F- Disposition of a resource property-- summary under Paragraph (a) Summary Under Tax Topics- Income Tax Act- Section 54- Proceeds of Disposition- Paragraph (a) proceeds included full (undiscounted) deferred cash proceeds, but might exclude share consideration (with volatile market price) until issued The Vendor sold a percentage interest in mineral claims (the “Mining Properties”) for consideration including deferred cash payments and shares to be issued by the public-company Purchaser, in each case, to be paid or issued over a four-year period. ... Turning to the deferred share issuance consideration, the Directorate noted that the shares’ market price could “fluctuate greatly,” and indicated that the TSO accordingly might: conclude that such portion of the proceeds of disposition for the Mining Properties by the Vendor is not determinable prior to the date of issuance of the shares by the Purchaser and that such portion of the proceeds of disposition would be recognized for tax purposes at the times of their issuance …. ...