Search - consideration

After FSL had subsequently sued the Province for reducing the space that was leased by it, the action was settled by the Province agreeing to pay FSL $2,056,250 in cash and, for $2,400,000, to grant an irrevocable assignable option (the “Option”) to FSL to purchase Founders Square (which was stated to have a fair market value of $2.4 million), together with an assignment of the Ground Lease in favour of FSL The $2.4 million consideration was to be funded by way of set-off against an additional amount of $2.4 million amount owing by the Province to FSL under the settlement agreement. ... FSL assigned $160,000 of the $2.4 million amount, that it was entitled to receive under the settlement agreement from the Province, to ADL in consideration for an ADL promissory note. FSL then surrendered the existing ground lease to the Province pursuant to a surrender agreement which stated that the consideration provided by FSL thereunder to the Province was “$10.00 and other good and valuable consideration,” the Province transferred the fee simple interest in Founders Square to ADL, and ADL and FSL entered into the new ground lease. ...

The Queen, 2018 TCC 3, aff'd on s. 18(1)(a) grounds 2019 FCA 36-- summary under Paragraph 110.1(1)(a) Summary Under Tax Topics- Income Tax Act- 101-110- Section 110.1- Subsection 110.1(1)- Paragraph 110.1(1)(a) consideration for "gift" was elimination of obligation to invest the funds The appellant was the limited partner of a partnership (“SEC”) that had become insolvent during efforts to relaunch a paper mill close to the City of Chandler. ... Dupont, 2016 QCCA 47 at paras. 28-31 for the proposition that for there to be a gift there must be “a transfer of property of a donor to a donee without the donor receiving equivalent consideration in return” and that “the donor must have the actual intention to part with the transferred property for the benefit of the donee without receiving a benefit in return” (para. 37), and in finding (respecting the first test) that the appellant had received consideration equal to the two resulting “gifts” by it to the City of $7.2 million and $2.1 million, Ouimet J stated (at paras. 45-6, TaxInterpretations translation): When the appellant proposed to SDEIC and the City of Chandler to pay these sums to the City of Chandler, the obligation of the appellant towards SDEIC still existed. ... Since the payment of the sums … to the City of Chandler had the effect of freeing the appellant of its obligation to negotiate in good faith to create a limited partnership, the consideration received by the appellant in exchange for such payment was the amount by which that obligation was extinguished. ...

Treaty where the recipient never had any interest in the oil field A Canadian corporation (“Sulpetro”), which had rights to direct and receive the proceeds from a licence its U.K. subsidiary (“SUKL”) held in an offshore U.K. oil and gas field (the “Buchan field”), sold its rights (along with a sale for nominal consideration of its shares of SUKL) in December 1986 to a U.K. purchaser (“BP”) for consideration that included a royalty that became payable, based on production from the field, when the market price of oil (less certain expenses) exceeded US$20 per barrel. ... Treaty to impose tax on the royalty payments received by RBC and, in particular, whether they fell within the portion of the definition of “immovable property” in Art. 6(2) (the “fifth limb”) that referred to "rights to variable or fixed payments as consideration for the working of, or the right to work, mineral deposits, sources and other natural resources". ... She went on to agree with RBC’s further alternate ground of appeal that since it was SUKL, and not Supeltro, that in fact held the licence from the U.K. to exploit the Buchan field, it was Sulpetro rather than SUKL that had the right to extract oil, i.e., the royalty payments could not be consideration for a "right to work" within the fifth limb because Sulpetro never held that right. ...

The Queen, 95 DTC 200, [1994] 2 CTC 2450 (TCC), briefly aff'd 96 DTC 6085 (FCA)-- summary under Subparagraph 152(4)(a)(i) Summary Under Tax Topics- Income Tax Act- Section 152- Subsection 152(4)- Paragraph 152(4)(a)- Subparagraph 152(4)(a)(i) goodwill consideration misrepresented as fees The taxpayer was found to have made a misrepresentation attributable to neglect, carelessness or wilful default when it deducted "management fees" in its tax returns paid pursuant to a consulting agreement whose legal substance was the provision of consideration for the purchase of goodwill. ...

., 98 DTC 1335, [1998] 1 CTC 2821 (TCC)-- summary under Subsection 97(2) Summary Under Tax Topics- Income Tax Act- Section 97- Subsection 97(2) capital withdrawal in substance boot The taxpayer borrowed money from a bank, contributed the borrowed money and a shopping centre to a partnership in consideration for the assumption of indebtedness and the issuance of debt and a partnership interest. ... In finding that s. 85(1)(b) should be applied to increase the consideration deemed to be received by the taxpayer to an amount above that initially elected, Bell TCJ. stated (at p. 1339): "The withdrawal of approximately 2/3 of the capital account at the time of asset transfer followed 38 days later by the withdrawal of the balance is inconsistent with the concept of a true capital account. ...

Loss The taxpayer entered into an agreement with the corporation owned by him and his wife to be paid fees in full consideration for providing guarantees of loans to be made to the corporation by The Royal Bank. However, in the absence of specific evidence that the fees actually paid by the corporation to the taxpayer were consideration for the provision of guarantees rather than for other services, Bonner J. found (at p. 1096) that the "guarantees were not shown to have been given in the course of a business or adventure in the nature of trade involving the provision of guarantees for reward". ...

Vaillancourt-Tremblay, 2010 DTC 5079 [at at 6833], 2010 FCA 119-- summary under Subsection 84(2) Summary Under Tax Topics- Income Tax Act- Section 84- Subsection 84(2) s. 84(2) inapplicable to tuck-under transaction In order to convert their shares of a private company ("MHT") that held preferred shares of a Canadian public corporation ("Videotron") into excluded property, the taxpayers transferred their shares of MHT to a newly incorporated corporation ("8855") in exchange for shares of 8855, and then had MHT transfer its Videotron securities to 8855 on a rollover basis in consideration for convertible securities of 8855. The taxpayers then sold their shares of 8855 to Videotron in consideration for shares of Videotron and Videotron wound up 8855 on a rollover basis, with the securities that 8855 held in Videotron thereby being cancelled. ...

The consideration which Boots received for those goods did not include the value of such coupons which were presented to it: "It is clear from the coupon's legal and economic characteristics... that, although a 'nominal value' is indicated on it, the coupon is not obtained by the purchaser for consideration and is nothing other than a document incorporating the obligation assumed by Boots to allow to the bearer of the coupon, in exchange for it, a reduction at the time of purchase of redemption goods. ...

The taxpayer unsuccessfully submitted that the old age security payments qualified as a "pension" for purposes of the Canada-Ireland Treaty (which define pensions as "periodic payments made in consideration of past services") because those payments were granted in consideration of twenty years of residence in Canada during which he rendered a contribution to the Canadian economy. ...

., 76 DTC 6010, [1976] CTC 24 (FCTD)-- summary under Agency Summary Under Tax Topics- General Concepts- Agency weight given to written agreement terms in finding that intermediary purchased as principal The taxpayer, in order to defer pursuant to s. 20(1)(n) the recognition of gain on the sale of land to the City of Calgary, agreed to sell the land to a trust company for cash consideration payable in eight years time. The trust company contemporaneously sold the land to the City for close to immediate consideration. ...