Search - consideration

The taxpayer then transfer the OPCO shares to a NEWCO which, as consideration, assumes the bank debt incurred by the borrowing and the promissory note issued by the taxpayer, and issues one common share having a nominal PUC. ... Position: We are prepared to grant a favourable tax ruling in situations similar to that described above provided that: (a) It is clear that a taxpayer is inadvertently caught by the provisions of section 84.1, (b) there is no other avenue open to the taxpayer by which he might otherwise avoid these provisions (in this regard, we would not force a taxpayer to incur an unreasonable tax cost with respect to such "other avenue"; eg. taxes on a redemption could be significantly higher than taxes on a capital gain), and (c) we are reasonably satisfied that a favourable ruling would not give an opportunity to the taxpayer to derive any unintended benefit that could flow from any subsequent transaction in the shares transferred or in the shares taken back as consideration for the transfer. ...

In general however if the provisions of proposed section 183.1 of the Act are enacted as contained in Bill C-64 we are of the opinion that where shares of a corporation resident in Canada held by an individual are acquired for consideration exceeding the paid-up capital of those shares immediately before the acquisition a distribution of corporate surplus will be deemed to have occurred and a tax may become payable in accordance with the provisions of that section of the Act unless one of the specific exceptions contained therein is met. Whether or not a particular transaction or event, such as the payment of a dividend as described above, is part of a series of transactions or events which would cause the provisions of proposed section 183.1 of the Act to apply is a question of fact which could only be resolved after a complete review of all the relevant facts of a particular situation and consideration of the provisions of subsection 248(10) of the Act. ...

It is unlikely that the other partners would wish to pay tax on what is, in effect, a "paper profit" and for which they received no money or other consideration. ... With the exception of transactions involving the transfer of property to the partners for no consideration, each partner's rights and obligations remain unchanged. ...

Prior to the acquisition and in contemplation of it, Targetco transfers one or more of its businesses to each of several separate wholly-owned subsidiaries of Targetco pursuant to subsection 85(1) of the Act, in consideration for shares of the subsidiaries. ... Section 54.2 of the Act would provide, in respect of the assumed facts in your example, that the shares of the subsidiaries received by Targetco in consideration for the businesses transferred would be deemed to be capital property of Targetco. ...

In general terms, where an individual disposes of shares of a subject corporation, within the meaning of subsection 84.1(1), to another corporation with which the individual does not deal at arm's length for consideration comprised only of cash and debt of the other corporation and, immediately after the disposition, the subject corporation would be connected with the other corporation, paragraph 84.1(1)(b) applies to deem the individual to have received a dividend equal to the amount by which the value of the non-share consideration received from the other corporation exceeds the, paid-up capital of the transferred shares of the subject corporation. ...

The consideration received by Mr. A on the transfer consists of the following: a) non-share consideration, the value of which equals the agreed amounts; b) one common share with nominal value; and c) a number of redeemable preference shares with no par value, redeemable/retractable at an amount equal to the excess, if any, of the fair value of the farm property over the total fair value of a) and b) above. ...

Where property is received by a shareholder in consideration for the disposition of a share of the corporation, section 86.1 does not adjust the income inclusion or the deduction of the loss resulting from the disposition of the share. ... Accordingly, the surrender by the Taxpayer of their common shares of US Pubco as consideration for the receipt of common shares of US Pubco Spinco does not constitute an “eligible distribution” contemplated by section 86.1. ...

A") of the capital stock of a corporation ("Opco") transfers the particular shares to Opco for consideration that includes shares of Opco and that, even though all of the shares of a particular class were so transferred, the provisions of subsection 86(1) of the Act would not apply by virtue of the limitation provided in subsection 86(3) of the Act. ... (iii) The share attributes of the particular shares of Opco received as consideration for the particular shares of Opco transferred are not identical. ...

Essentially, the issue in respect of the particular case here under consideration is the date at which the seller and buyer intended that title to the equipment passed to the buyer, having regard to the fact that the equipment was not in existence on the date the agreement of sale was entered into, but was to be (and was) subsequently manufactured by the seller. ... It is submitted that in the case here under consideration, XXX So far as we can determine from the materials you provided to us XXX Variation in Exchange Rate Before Date of Acquisition So far as we have been able to determine, there is no case law or statutory guidance as to the treatment of variations in the exchange rate before the date of acquisition of the property. ...

Consequently, while CPP contributions that are required to be paid during the leave period are to be deducted and remitted by the trustee as by any other employer, those CPP contributions paid in the year prior to the leave period must be taken into consideration by the trustee. ... However, since CPP contributions made during the year prior to the leave period are to be taken into consideration by the trustee, the amount of contributory earnings reported by the trustee may not coincide with the earnings reported in box "C" for that particular year. ...