Search - consideration

Each year some of the employees of Corporation A are offered non-voting common shares of Corporation B for no consideration. ... the transaction was a gift for no consideration or a transaction between the employer and employees for consideration (i.e.- for services rendered). Generally, transactions between an employer and arm's length employees occur by virtue of their employment and are for consideration (i.e.- they are not gifts). ...

19 September 1991 Ruling 91M09121 F- Dividends and Section 160 Unedited CRA Tags 160(1)(e)(i) QUESTION 48- DIVIDENDS AND SECTION 160 QUESTION Under subparagraph 160(1)(e)(i) of the Act, a non-arm's length transferee of property may be liable jointly with the transferor  and is limited to the amount by which the value of the transferred  property exceeds the value of any consideration given for the property.  ... Does Revenue Canada agree that for the purposes of subparagraph 160(1)(e)(i) of the Act (a)  the declaration of the dividend does not constitute a  transfer of property, and (b)  the extinguishment of the corporate debt on payment of the dividend constitutes valuable consideration given for the dividend? ... The purpose of this paragraph to prevent a person with substantial income tax liability from defeating the claims made on him by transferring his property to any non-arm's length party at less than fair market value consideration. ...

It is your opinion that paragraph 110.6(7)(b) of the Act would not apply because consideration referred to in the paragraph is not the amount agreed upon (the "elected amount") referred to in subsection 85(1) of the Act. ... We agree that the term "consideration" as referred to in paragraph 110.6(7)(b) of the Act does not mean the elected amount referred to in subsection 85(1) of the Act. ... However, if the total consideration received by a transferor is significantly less than the fair market value of the property transferred in a transaction governed by section 85 of the Act, paragraph 85(1)(e.2) of the Act would apply in addition to paragraph 110.6(7)(b) of the Act. ...

During a reorganization of capita1 by XXXX the corporation redeems all of its common shares and in return issues new common shares and certain non-share consideration. ... In this case, as the fair market value of the non-share consideration received exceeds the ACB of to XXXX of his old shares of XXXX the ACB of his new shares will be nil and the proceeds of disposition of his old shares will be equal to the fair market value of the non-share consideration received. The resulting capital gain should be computed in Canadian dollars and the relative U.S. dollar amounts should be converted to Canadian dollars at the rate of exchange in effect at the time XXXX acquired the old shares to determine his ACB and at the time XXXX received the non-share consideration on the recapitalization of XXXX to determine proceeds of disposition. ...

Conference- September 1991 Question 48- Dividends and Section 160 Question Under subparagraph 160(1)(e)(i) of the Act, a non-arm's length transferee of property may be liable jointly with the transferor and is limited to the amount by which the value of the transferred property exceeds the value of any consideration given for the property. ... Does Revenue Canada agree that for the purposes of subparagraph 160(1)(e)(i) of the Act (a) the declaration of the dividend does not constitute a transfer of property, and (b) the extinguishment of the corporate debt on payment of the dividend constitutes valuable consideration given for the dividend? ... The purpose of this paragraph to prevent a person with substantial income tax liability from defeating the claims made on him by transferring his property to any non-arm's length party at less than fair market value consideration. ...

Ce même jour, votre client et son épouse ont signé une convention aux termes de laquelle votre client stipule qu'il reconnaît devoir à son épouse la somme de XXXXXXXXXX en considération de la renonciation de cette dernière au partage du patrimoine familial et en guise également de paiement de la prestation compensatoire due, vu la collaboration de l'épouse de votre client à l'exploitation de la ferme. Votre question Vous vous demandez si le Ministère entend appliquer les dispositions du paragraphe 74.1(1) de la Loi de l'impôtsur le revenu (la "Loi") aux paiements faits en acquittement d'une prestation compensatoire ou au paiement fait en considération de la renonciation du conjoint au partage du patrimoine familial. Votre position Vous êtes d'avis qu'un paiement versé en considération de la renonciation au patrimoine familial est sujet aux règles d'attribution et qu'ainsi le revenu découlant d'un tel paiement serait considéré comme un revenu du payeur. ...

Thus, ACo sells the property to BCo at its fair market value of $1,000,000 and the consideration received is: a mortgage of $200,000 assumed, preferred shares $800,000, total: $1,000,000. In addition, on the sale, BCo agrees to assume a $500,000 mortgage in consideration for the issue of a demand note by ACo to BCo for $500,000. ... Can BCo continue to deduct interest on the portion of the $500,000 mortgage which corresponds to the debt assumed in consideration of the demand note by ACo to BCo? ...

In most purchase and sale transactions, the consideration exchanged accurately reflects the sale price. ... Canadian courts have, on several occasions, considered the determination of POD where differences existed between the reported sales price and the value of consideration exchanged. ... MNR, [63 DTC 347] (TAB), aff'd. [66 DTC 5100] (SCC), the appellant sold a hotel to a corporation for consideration consisting of shares and a mortgage. ...

If Parent provides indemnities to the Target shareholders for any representations, warranties, etc. in the form of cash payment to Target shareholders, would this be consideration other than shares of Parent for purposes of subsection 87(4)? ... It looks like the share consideration to be received by a shareholder of a predecessor corporation may be reduced by a repurchase by Parent of shares issued as consideration for shares of a predecessor corporation for $1 and the value of the shares repurchase would correspond to the indemnity claim made by the Parent. ... In this situation, the reduction in value of the shares held by the Target shareholders is made as consideration for the settlement of the indemnity claim. ...

Employment income received by an employee is a valuable consideration for the services he renders under a written or verbal employment contract. Dividend income received by a shareholder is in consideration for the capital he has invested by buying shares of the corporation. ... Accordingly, where all the facts of a particular situation point to the conclusion that the dividend an employee-shareholder receives is in consideration for the services he renders as an employee, this income, in our opinion, would be taxable as employment income pursuant to subsection 6(3) of the Income Tax Act. ...