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1 November 1990 Income Tax Severed Letter QUESTION I-78 Loan Guarantee from Non-resident for no Consideration A Canadian corporation ("Canco") borrows funds from an arm's length lender (the "lender"). Canco's non-resident parent corporation (the "parent") guarantees the loan for no consideration. ... Since the parent did not receive consideration for its guarantee of the loan, the parent will not be deemed by paragraph 214(15)(a) of the Act to have been paid interest on the loan. ...

Accordingly, does section 84 apply where non-share consideration is received by a shareholder of the amalgamated corporation as part of the exchange of his shares of the predecessor corporation for the new shares of the amalgamated corporation? ... As a result, an amalgamation can be an amalgamation to which section 87 applies even where a shareholder of a predecessor corporation receives both shares of the amalgamated corporation and non-share consideration in exchange for shares of the predecessor corporation. On this basis, the position in paragraph 52 of IT-474R would apply to a section 87 amalgamation where the shareholder of a predecessor corporation receives both shares in the amalgamated corporation and non-share consideration in exchange for shares in the predecessor corporation. ...

Holdco will not receive any non-share consideration on the transfer of the DC shares. 50. ... DC will not receive any non-share consideration on the transfer of the Landco1 shares. 53. ... DC will not receive any non-share consideration on the transfer of the Landco3 shares. ...

There is no basis, in my view, for confining the word "consideration" to executed consideration. ... There is no basis, in my view, for confining the word "consideration" to executed consideration. Consideration is of two kinds-executed and executory-and it would be an unwarranted restriction on that term to limit it to only one of the two types. ...

You are enquiring whether or not a general partnership can transfer goodwill pursuant to subsection 85(2) to a taxable Canadian corporation without any tax consequences where the non-share consideration is in excess of the agreed upon amount. ... The assumption of the partnership debt by Corp would be considered non-share consideration received by the partnership. As noted in paragraph 10 of IT-291R3, pursuant to paragraph 85(1)(b), the agreed amount generally cannot be less than the fair market value of the non-share consideration received. ...

GST should be collected and remitted based on the fair market value of the consideration at the time the supply was made. ... We note that GST will be imposed under subsection 165(1) of the ETA, which states that "every recipient of a taxable supply made in Canada shall pay to Her Majesty in right of Canada tax in respect of the supply calculated at the rate of 5% on the value of the consideration for the supply". The value of consideration upon which tax is imposed under section 165 of the ETA is outlined in subsection 153(1) which states that the value of the consideration, or any part thereof, for a supply shall be deemed to be equal to: (a) where the consideration or that part is expressed in money, the amount of the money; and (b) where the consideration or that part is other than money, the fair market value of the consideration or that part at the time the supply was made. ...

Property was transferred to a qualified donee for consideration in year 1. ... No receipt was issued due to consideration given. In year 11, a valuation was obtained suggesting property gifted could have been divided into sets with one set having a fair market value equal to the cash consideration for the transfer. ... In general, a gift is defined as a voluntary transfer of property without consideration. ...

Position: Yes Reasons: Consideration is received by each member in the form of a promise by the club to repay the sum of $XXXXXXXXXX. ... You have stated that in order for a promise to be enforceable, there must be consideration. ... Black's Law Dictionary defines "consideration" as "the inducement to a contract. ...

Subparagraph 40(2)(g)(ii) of the Act, however, deems the capital loss to be nil where the guarantee was given for no consideration. ... In the noted Bulletins guarantees were given for no consideration to corporations in which the guarantor had an interest. While it is admitted that Bowater and its co-venturer guaranteed for no consideration the debts of Bulkley Valley, they were never called upon to honour this guarantee. ...

The majority of the shares of Target was acquired for cash consideration by Parent Acquisitionco, while the remaining shares of Target were acquired by Parent directly in consideration for shares of Parent. ... The redemption value of a Newco Preferred Share was equal to the FMV of any property received in consideration for its issuance less any consideration received for subsequent reductions of PUC in respect of the share. ... The balance of the consideration for the XXXXXXXXXX Rights was paid in cash. ...