Search - consideration

MNR, 59 DTC 1102, [1959] CTC 172 (Ex Ct)-- summary under Computation of Profit Summary Under Tax Topics- Income Tax Act- Section 9- Computation of Profit considertion paid for land was par value of shares issued The original shareholders of the taxpayer had transferred raw land (which they had valued at $355,000, based on an estimated selling price for building lots minus a 45% discount for estimated expenses) to the taxpayer in consideration for the issue of shares having a par value of $200,000. ... Cameron J. held (p. 1108) that: "The consideration paid by the appellant for the... lots was the par value of the shares issued and nothing more. ... " The cost of the lots was not affected by the contemporaneous transfer of additional land to the taxpayer in consideration for shares, with a view to donating such land to the University of Manitoba in order to enhance the value of the land retained by the taxpayer. ...

Before going on to find that this lease represented a supply of the system for non-nominal consideration (so that there was a change of use under ss. 209(2) and 199(3) entitling the appellant to recover the basic tax content of this asset), C Miller J accepted that s. 141.01 required the appellant to establish that its use of the system was for the purpose of making taxable supplies for consideration, stating "if a registrant is in the unique position of only making taxable supplies without consideration, then section 141.01 should apply to deny the ITCs. ...

Canada, 2004 DTC 6409, 2004 FCA 191-- summary under Adjusted Cost Base Summary Under Tax Topics- Income Tax Act- Section 54- Adjusted Cost Base cost of bonds equal to their FMV In finding that the cost to a partnership of bonds acquired by it in consideration for the issuance of units of the partnership was equal to the fair market value of the bonds at the time of acquisition, Sharlow J.A. indicated (at para. 31) that this "method of determining the acquisition cost of the bonds is based on the well established principle of income tax law that the cost of property acquired by a taxpayer is the amount of money or the value of the consideration given in exchange for the property" and noted that as at substantially all of the partnership property comprised the acquired bonds, it was reasonable to conclude that the value of the consideration paid by the partnership for the bonds was equal to the fair market value of the bonds when acquired. ...

.)-- summary under Computation of Profit Summary Under Tax Topics- Income Tax Act- Section 9- Computation of Profit A corporation purchased various assets including inventory in consideration for the payment of £10,500 and the issue of 29,997 fully-paid shares with a par value of £1 each. ... Accordingly, when fully paid shares are properly issued for a consideration other than cash, the consideration moving from another company must be at the least equal in value to the par value of the shares and must be based on an honest estimate by the directors of the value of the assets acquired. ...

ING Intermediate Holdings Ltd v HMRC, [2017] EWCA Civ 2111-- summary under Subsection 153(1) Summary Under Tax Topics- Excise Tax Act- Section 153- Subsection 153(1) interest paid by bank to depositors was reduced by implied fees earned as consideration going to the bank Although accepting (per BLP) that a mere borrowing by a company is not a supply by it, Arden LJ confirmed the finding below that the services provided by ING to its on-line depositors (including 24-hour access to their deposits) were more than merely “peripheral” to the borrowing represented by the deposits, so that ING was engaged in an exempt banking business. In finding that ING was also making such supplies for consideration notwithstanding that it advertised itself as providing “no fee” banking, she stated (at para. 46, adopting findings below): [T]he contract was one of barter. The bank provided the banking facilities and interest payments in exchange for the making of the loan. … The provision by the customer of the loan was the consideration for both the payment of interest and the provision of the banking services. ...

Autoridade Tributária e Aduaneira (2018), ECLI:EU:C:2018:942 (ECJ (5th Chamber))-- summary under Subsection 182(1) Summary Under Tax Topics- Excise Tax Act- Section 182- Subsection 182(1) fee for early termination of services contact was consideration for the service Subscribers to the services of a Portuguese telecommunications company (“MEO”) agreed to pay for a minimum subscription period, and when they discontinued service before the end of that guaranteed period they were required under the terms of their contracts to pay a lump sum equal to their monthly subscription fee multiplied by the number of remaining months in the guaranteed period. The ECJ found that this lump sum was taxable “consideration” received by MEO for its services on ordinary principles, stating (para. 45): [I]t must be held that the consideration for the amount paid by the customer to MEO is constituted by the customer’s right to benefit from the fulfilment, by MEO, of the obligations under the services contract, even if the customer does not wish to avail himself or cannot avail himself of that right for a reason attributable to him. ...

HER MAJESTY THE QUEEN, 2021 FCA 17-- summary under Effective Date Summary Under Tax Topics- General Concepts- Effective Date price adjustment clause eliminated any possible value discrepancy between the FMV of the transferred property and the consideration therefor Before finding that s. 160 did not apply to a s. 55(3)(a) spin-off transaction in which each component transaction entailed a value-for-value exchange including the issuance and redemption of preferred shares with a price adjustment clause, Noël CJ noted, in passing, at para. 50: …160(1)(e)(i) … provides that the consideration is inadequate when the fair market value of the property transferred exceeds the fair market value of the consideration given at the time of the transfer (see Birchcliff Energy Ltd. v. ...

HER MAJESTY THE QUEEN, 2021 FCA 17-- summary under Subsection 84(9) Summary Under Tax Topics- Income Tax Act- Section 84- Subsection 84(9) a shareholder whose shares have been redeemed has provided valuable consideration therefor by surrendering its shares Pursuant to a conventional s. 55(3)(a) spin-off transaction, a company (“Oldco”) spun off one of its two businesses to a “Newco,” also owned by its sole individual shareholder. ... One of the unsuccessful arguments made by the Crown in seeking to uphold a s. 160 assessment of Newco was that on the redemption by Oldco of its preferred shares held by Newco for a $30 million note, “no consideration was effectively given to Oldco in return” (para. 65). He stated that there indeed was consideration going the other way in the form of “Newco in turn … surrender[ing] the shares which had a corresponding $30 million value in its hands” (para. 69). ...

In my view, the appropriate translation date should be when the consideration for the Common Shares was received by Agnico....... ... This is when the true consideration for the issuance of the Common Shares was received by Agnico.......Suppose convertible debentures are issued for $1,500, [and] the principal amount... is $1,100.... [T]he true consideration [for the shares on the debenture conversion] is $1,500....... ...

D’Arcy J found that the Annual Resort Fees were consideration for a service rather than intangible personal property, stating (paras. 237-8): The Appellant does not provide any rights in consideration of the Annual Resort Fee. … What it supplies is the agreement to use the Annual Resort Fees to fund its operations. … This…is the supply of something other than property. In rejecting the Appellant’s submission that it “made, in consideration of the Annual Resort Fee, separate single supplies of services in respect of each Vacation Home,” he stated (at para. 259): It made a single supply by agreeing to use the Annual Resort Fee to fund its operations…with the consideration being based upon the Appellant’s total estimated costs. ... After noting (at para. 213) that where a service relates both to real property inside and outside Canada, ss. 142(1)(d) and 142(2)(d) “deem two mutually exclusive events to occur” i.e., that supply occurs inside and outside Canada, and (at para. 272) that “the supply of the Annual Services relates in part to real property in Canada and real property outside of Canada,” and finding (at para. 288) that “the GST Act …contemplates a single supply which is either subject to tax on the whole consideration paid for the supply or not subject to tax at all,” he found (at para. 318) that this inconsistency should be resolved on the basis that: [P]aragraphs 142(1)(d) and 142(2)(d)…only apply if the single supply of a service relates solely to real property. ...