Search - consideration

S. 6(3)(c) refers to an amount received as consideration (or partial consideration) for accepting the office or entering into the contract of employment. ... S. 6(3)(e) refers to an amount received in consideration (or partial consideration) for a covenant with reference to what the officer or employee is, or is not, to do before or after the termination of the employment. ... Where on the sale of shares of a company by the owner-manager, monthly payments thereafter received by the individual from his form employer will not be taxable under s. 6(3)(d) or (e) if the payments in substance are not consideration for services or restrictive covenants provided by the former employee (Wilson), even perhaps if the parties purported to agree that the payments would be consideration for consulting services that they had no intention of requesting or providing, as the case may be (Beaupré Estate). ...

No tax on: mortgages leases with remaining term including extensions or renewals provided for in the lese or related documents of under 50 years transfer to nominee for nil consideration if no relevant previous beneficial transfers transfers on amalgamations (LTT-3) Exemptions for unregistered dispositions: de minimis partnership transactions (5% increment per year), but not where transferee is trust or partnership transfer or issuance of mutual fund units transfers between affiliated corporations (if timely deferral application and no subsequent registration in group (s. 3(13.1))) butterfly reorganizations employee relocation plans TOR See MLTT Rates and Calculation Toronto Municipal Code, C. 760 City of Toronto imposes a tax (over and above Ontario tax) on the same base as Ontario 0.5% on first $55,000 of value of consideration; 1.0% on next $195,000; 1.5% on next $150,000; 2.0% on excess over $400,000; Plus an additional 0.5% on property with one or two family dwellings to extent the consideration exceeds $400,000 Same as Ontario plus some additional exemptions in s.760-14, e.g., for Toronto municipal bodies QC Act Respecting Duties on Transfers of Immovables Municipalities are obliged to levy their own duties on the transfer of an immovable. ... Calculated on the "basis of imposition:" the greatest of: consideration furnished; price in deed; and market value for municipal tax purposes (i.e., municipal roll value multiplied by designated factor): 0.5% of basis of imposition up to $50,000 1.0% on the next $200,000 1.5% of excess However, since 2017, municipalities have been authorized to increase the marginal rate for value in excess of $500,000 to 3.0%, and some have done so. ... No tax on mortgages leases with unexpired term of 21 years excluding renewals (s. 3(t)) No tax on changing the registered name reflecting an amalgamation PEI Real Property Transfer Tax Act (see also Lands Protection Act) Tax is triggered only on an acquisition by deed (s. 3(1)) 1% of the greater of the consideration for the transfer and assessed value No payment for mortgages given to banks, trust companies and other financial institutions acting in the ordinary course of businessRegistered transfers between wholly-owned corporations are exempted.No tax on registration on title of notice of an amalgamation. ...

Thus, a transfer of property by the CRIC to the subject corporation is an investment for such purposes even if the CRIC does not receive any consideration, such as the issuance of shares or debt, of the subject corporation. ... Example 10b-A (conferral of benefit) CRIC transfers intellectual property to a non-resident subsidiary in consideration for an obligation to pay a royalty. ... For example, the transfer by a CRIC of shares of one non-resident subsidiary to a second non-resident subsidiary for nominal share consideration would generally qualify for rollover treatment under s. 85.1(3), so that s. 212.3(18)(b)(ii) would deem there to be no resulting investment by the CRIC in the second non-resident subsidiary notwithstanding that it likely would be considered to have conferred a benefit on it. ...

Suppose that shares of Target are acquired in consideration for shares of a parent (Pubco) of the acquirer of Target (Bidco). ... The question arises as to whether such parent (Amalco) can satisfy the requirement that the shares of Pubco were received by the Target shareholders in consideration for their shares of Amalco – when in fact, the Pubco share were instead issued in consideration for the acquisition of the shares of a predecessor of Amalco, namely, Target. ... A similar issue and resolution arises under s. 88(1)(c.4)(i) where the bid consideration is shares of the parent rather than its shareholder. ...

Conversely, s. 272.1(3) provides that a supply of services made by a member of a partnership otherwise than in the course of the partnership's activities is deemed to have been supplied for consideration equal to the fair market value of the supplied services, so that such deemed fair market value consideration generally is subject to GST/HST at the applicable rate. ... Such a view would imply that s. 272.1 is not an exclusive code governing the treatment of consideration received by a partner from a partnership. ... As is discussed below under s. 272.1(8), that provision effectively treats partnership draws received by the general partner of an investment limited partnership as consideration for taxable supplies by it. ...

Under s. 7(1)(b) an employee will be deemed to receive a taxable benefit equal to the value of any consideration received on the disposition of an employee stock option to a person with whom he or she was dealing at arm's length (minus any amount paid by the employee to acquire those options). It is clear that s. 7(1)(b) applies when the employee voluntarily surrenders his or her options to the issuer of the options (with whom he or she deals at arm's length) in consideration for a cash payment (Greiner, Harvey). ...

Although partners often receive interim draws during the year, the final amount of the consideration for the supply of their services to the partnership for the year (in the form of a final determination of their respective entitlements to partnership profits) will not be determined until the accounts of the year are finalized. ... If this final payment were considered to be part of the consideration for the services it rendered prior to September 8, 2017, the draws received by it in 2017 prior to that date very well might be retroactively subject to s. 272.1(8). The second branch of the effective date rule indicates that s. 272.1(8) would apply even if all of the consideration for the supply became due (or was paid) before the announcement date unless the supplier (the GP) did not, on or before that day, charge, collect or remit any GST/HST in respect of the supply. ...

Example 2-A (basic FA dumping transaction) A Canadian subsidiary (a CRIC) of a non-resident corporation (the parent) purchases the shares of a non-resident subsidiary of the parent, having a fair market value ("FMV") of $100 in consideration for issuing interest-bearing debt to the parent of $60 and shares having a PUC and FMV of $40 (i.e., consideration that complies with the thin capitalization rules in s. 18(4)). ... In these situations, it would often be the case that the acquired Canadian corporation would also own assets other than foreign affiliate shares and thus, it is necessary to reasonably allocate the consideration paid by the CRIC to the foreign affiliate assets. In the absence of specific factors that indicate otherwise, it would be expected that the most reasonable way to allocate the consideration would be on a pro-rata basis based on the fair market value of the underlying assets acquired. ...

There has been found to be an indirect distribution of corporate property to a shareholder where the shareholder sells a corporation, whose principal assets consist (perhaps as a result of a sale of business assets) principally of liquid assets, to an accommodation party for cash consideration, where that purchaser, as part of the same series of transactions, merges with or receives distributions from the purchased corporation in order to recoup the funds used to pay the purchase price (RMM, see also Smythe, David). ... Pipeline transactions CRA has been willing not to apply s. 84(2) to "post-mortem pipeline transactions" in which an estate, whose cost of shares of an Opco have been stepped up on the death of the deceased under s. 70(5), sells the shares of Opco (or a Holdco holding an Opco) to a Newco in consideration for a promissory note, which then is paid off by Newco from distributions out of the Opco assets- provided that there is a one-year delay before such distribution occurs (see, most recently, 2012-0464501R3, 2012-0401811R3 and 2011 STEPs Roundtable, Q. 5 2011-0401861C6). ... It also has ruled that s. 84(2) applies where the share consideration received on the sale of a newly-incorporated business of the public company is distributed to the purblic company's shareholders (2012 Ruling 2012-0435291R3), although presumably such distribution would be exempted from deemed dividend treatment under the proposed amendments to s. 84(4.1) (one-time distribution of proceeds of disposition) if it were not already exempted by s. 84(2). ...

Availability of election Where a taxpayer disposes of property to a taxable Canadian corporation for consideration that includes shares in the capital of the corporation, the taxpayer and corporation may make a joint election in the prescribed form (i.e., on form T2057). ... It has been found that the requirement that the consideration for the disposition of the property include shares can be satisfied where the transferee corporation is under an obligation to issue shares to the taxpayer, but does not do so immediately (Dale). ... The minimum elected amount (subject to further limitations discussed below) is the value of consideration received by the taxpayer other than shares (the "boot"). ...