Search - consideration

NewAco will redeem the preferred shares held in it by PB1co, and by Dco, in each case in consideration for a note. PB1co will redeem the preferred shares held in it by NewCco in consideration for a note. ... Dco will redeem the preferred shares held in it by NewCco in consideration for the Dco Note. ...

(February 1990 Access Letter, ¶1106)-- summary under Subparagraph 40(2)(g)(ii) Summary Under Tax Topics- Income Tax Act- Section 40- Subsection 40(2)- Paragraph 40(2)(g)- Subparagraph 40(2)(g)(ii) Where a wife guaranteed for no consideration a bank loan to her husband's corporation in which she was not a shareholder, she was unable to claim a capital loss because the guarantee was given for no consideration and she was not a shareholder. ...

(Tax Window, No. 3, p. 6, ¶1268)-- summary under Proceeds of Disposition Summary Under Tax Topics- Income Tax Act- Section 54- Proceeds of Disposition RC's assessing policy that under a farm-out it is not possible to ascertain the value of the consideration flowing between the parties and, therefore, the consideration for the disposition should be treated as being nil, does not apply to "widespread farm-outs" in which the farmee incurs CEE or CDE in respect of one property in order to earn an interest in a non-contiguous property. ...

(Jan. 90 Access Letter, ¶1085)-- summary under Subsection 110.6(2) Summary Under Tax Topics- Income Tax Act- 101-110- Section 110.6- Subsection 110.6(2) GAAR would not apply to a transaction whereby an individual transferred his qualified farm property to a wholly-owned subsidiary in consideration for consideration comprising: boot equal to the adjusted cost base of the property plus $500,000; and shares. ...

2003 Ruling 2003-000498C- Qualifying disposition from trust to Sub-- summary under Paragraph 107.4(3)(m) Summary Under Tax Topics- Income Tax Act- 101-110- Section 107.4- Subsection 107.4(3)- Paragraph 107.4(3)(m) no increase to ACB of subtrust units where dropdown to the subtrust for no consideration On a transfer by a mutual fund trust (the "Fund") of shares and notes of a subsidiary to a subsidiary trust (the "Trust") of the Fund for no consideration, no amount would be added pursuant to s. 107.4(3) by virtue of such disposition to the cost of the Trust units owned by the Fund. ...

NR4 acquired all the NR6 shares from NR1 at FMV in consideration for an interest-bearing note (Note1). ... " S. 95(2)(a)(ii)(D)(II) also was not available as "NR2 acquired Note1 in consideration for the issuance of Note2…[so that] the property acquired was not shares of another foreign affiliate" and, furthermore "NR2 did not acquire any property upon the contribution of Note1 to the capital of NR3. ... Upon further consideration, we are of the view that subclause 95(2)(a)(ii)(D)(II)...applies in the circumstances.... ...

14 March 2016 External T.I. 2016-0626781E5- Neuman Type Situation-- summary under Subsection 56(2) Summary Under Tax Topics- Income Tax Act- Section 56- Subsection 56(2) s. 56(2) likely non-applicable 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. ... CRA responded: Consistent with… Neuman ….generally, subsection 56(2) will not apply to arrangements involving the payment of dividends by a corporation, provided that the applicable taxpayer does not have a pre-existing entitlement to the dividends and provided that proper consideration was given for the shares when issued. … While we have considered the application of subsection 245(2) in respect of the Neuman type income splitting arrangements in the past and have taken the position that GAAR does not apply, we have also specifically stated that this comment regarding the non-application of GAAR relates only to the Neuman case. ...

4 May 2016 External T.I. 2016-0634551E5- Ss 191(4) and PAC-- summary under Subsection 191(4) Summary Under Tax Topics- Income Tax Act- Section 191- Subsection 191(4) operation of a price adjustment clause to reduce preferred shares’ redemption amount to below the shares’ “specified amount” can result in full Part VI.1 tax The terms of taxable preferred shares specify an amount (not exceeding their issuance consideration) for which they are to be redeemed for the purposes of s. 191(4) and separately contain a price-adjustment clause (“PAC”) for the redemption price, based on the fair market value of the consideration for which they were issued (which did not include taxable preferred shares). ... On the other hand, if the PAC were to become operative to reduce the redemption amount to an amount that is less than the specified amount, the requirement in subsection 191(4), that the specified amount not exceed the fair market value of the consideration for which such shares were issued, would not be met. ...

19 September 2011 External T.I. 2011-0410411E5 F- Attribution- Transfers to Corporations-- summary under Subsection 74.4(2) Summary Under Tax Topics- Income Tax Act- Section 74.4- Subsection 74.4(2) s. 74.4(2) did not apply to the creation of a corporate asset protection structure Holdco's Active Shareholders set up a corporate asset protection structure and introduced certain key employees into the shareholding structure, through the following steps: (i) creation of a new family trust by each Active Shareholder involved in Holdco's business, whose spouse and minor children were the beneficiaries; (ii) Opco incorporated a new corporation ("Group Opco") for the protection of Opco's assets; (iii) Group Opco created a new corporation ("Opco 2") for Opco's day-to-day operations; (iv) Opco transferred all of its business assets (excluding excess cash and investments) to Group Opco, on as. 85(1) rollover basis in consideration for the assumption of liabilities, a promissory note and preferred rollover shares of its capital stock (i.e. non-voting, dividend-paying, redeemable, non-voting shares for an amount equal to the value of the consideration received on the issue of those shares); (v) Group Opco transferred to Opco 2, on a s. 85(1) rollover basis, its accounts receivable, inventory and goodwill in consideration for the assumption of accounts payable, and the issuance to Group Opco of a note and common shares.; (vi) The newly created family trusts and certain key employees subscribed for common shares of Group Opco for a nominal amount; (vii) Group Opco purchased for cancellation the common shares of its capital stock held by Opco for an amount equal to the subscription price for the latter; (viii Holdco and Opco amalgamate; (ix) each family trust shareholder of Holdco was wound-up and its assets (i.e. common shares of the capital stock of Holdco) were distributed to a holding corporation controlled by the Active Shareholder who had proceeded with a freeze of their interest in Holdco in favour of a family trust. ...

15 November 2016 External T.I. 2015-0597921E5- Subsection 138(11.94) election-- summary under Paragraph 138(11.5)(m) Summary Under Tax Topics- Income Tax Act- Section 138- Subsection 138(11.5)- Paragraph 138(11.5)(m) insurance assets transferred to a subsidiary in consideration for assuming obligations of the insurance business could qualify as “reinsurance premiums” In the context of a tax-deferred transfer of an insurance business carried on in Canada under s. 138(11.94), how are the terms “reinsurance premium” and “reinsurance commission” in s. 138(11.5)(m) interpreted? ... We note, however, that the term would not be limited to such assets and that it may apply more broadly to any amounts paid or payable to the transferee as consideration for the assumed obligations in respect of the transferred insurance business.... ... Further, paragraph 138(11.5)(m) of the Act refers to an amount that is paid or payable by the transferee to the transferor, whereas the definition under subsection 1408(1) of the Regulations generally refers to the excess of the premium paid by the policyholder for the policy over the consideration payable by the insurer in respect of the reinsurance or assumption of the risk. ...