Search - consideration

Reorganization transactions Consistently with reorganization transactions involving other types of property (see Hickman Motors), it has been found that the acquisition of a partnership interest from an affiliated person in a reorganization transaction, followed by an immediate sale of the partnership interest for consideration presumably equal to its fair market value at the time of such acquisition, is not a trading transaction (i.e., not a transaction that would motivate a trader)- so that the sale occurs on capital account (Continental Bank). ...

First, a general partner distribution, which otherwise might be deemed by draft s. 272.1(8) (when read in conjunction with s. 272.1(3)) to be consideration for a taxable supply of management or administrative services, as well as any separate fee by it or an affiliated Canadian corporation for management or administrative services could qualify as a zero-rated supply under Sched. ... As a qualifying taxpayer, it would be subject to a requirement to self-assess GST under s. 218.01(b) on its “qualifying consideration” for the year (as defined in s. 217, and assuming that it had not made an election under s. 217.2(1) to be subject to tax on its internal and external charges for the year), so that it potentially would be subject to GST on its deductible outlays or expenses made or incurred outside Canada as described in s. 217.1(2). ...

Parent then transfers its common shares of CRIC to CanHoldco in consideration for common shares of CanHoldco having a stated capital of $100. ... Then, under a plan of arrangement, the shareholders of Canco transfer their shares to CRIC in consideration for CRIC agreeing to cause the issuance to them of Parent shares having a FMV of $100. ... Next, under the Plan of Arrangement: (a) the shareholders of Canco transfer their shares to CRIC in consideration for $100 of cash which Parent is directed to deliver on CRIC's behalf; (b) Parent delivers $100 of cash to the shareholders of Canco in satisfaction of its subscription price for CRIC's shares; and (c) CRIC issue common shares to Parent (having a stated capital of $100) in consideration for such payment of the $100 subscription price. ...

Agreements for non-arm's length transfers of property by taxpayers to a corporation for share consideration typically contain a price adjustment clause under which the redemption amount of preferred shares received by the taxpayers, or the quantity of common shares issued to them, will be adjusted if the initially stipulated redemption amount or number of common shares issued to them proves to be different than the fair market value (net of assumed liabilities or debt issued to them) of the property they transferred to the corporation. ...

Example 25b-C (transfer to 2nd partnership with higher CRIC interest) Partnership 1 of which CRIC has a 50% partnership interest (with the other interest held by a 3 rd party) transfers its holding of 100% of the shares of FA, having a fair market value of $100, to Partnership2, in which CRIC and the 3 rd party have 90% and 10% partnership interests, respectively, in consideration for the assumption of $100 of third party debt. ...

The holding company also could transfer shares of subsidiaries to other foreign affiliates in consideration for debt without the debt restrictions in s. 212.3(18) applying. ... This situation could arise, for example, where a non-resident corporation controls the CRIC immediately before the CRIC acquires all the shares of another non-resident corporation from a Canadian-resident vendor and, as a result of the share consideration issued by the CRIC to the vendor, the CRIC ceases to be controlled by the non-resident corporation. ... Parent transfers its shares of Forco to CRIC, a Canadian widely-held public corporation whose assets are non-resident subsidiaries, in consideration for the issuance to it of voting common shares of CRIC (so that it now holds 70% of all such shares) and for the issuance to it of a special voting share – with there being a simultaneous issuance of a second special voting share to another non-resident person ("Associate") with whom Parent is on friendly terms. ...

One approach would be for it to agree with the GPs to provide to them, for fees (treated as consideration for taxable supplies by it), most of the management services needed for the management by the GPs of the Opco LPs. ... The special attribution method (SAM) formula in s. 225.2(2) (as modified by SLFI Reg. 48(3)) computes additional tax or a refund as a function of net federal tax (A-B in the formula), including tax on imported taxable supplies (s. 218) and tax on qualifying consideration (s. 218.01). ... The s. 218.01 qualifying consideration rule references a qualifying taxpayer which, in the case of a non-resident partnership, includes a person with a permanent establishment (in this context, including a permanent establishment as defined in s. 132.1(2)) in Canada, as well as a non-resident partnership that (as interpreted by CRA in B-095R) is majority-owned by persons who are resident in Canada or carry on business in Canada or conduct activities there. ...

Parent incorporates a Canadian-resident corporation (Buyco), which acquires all the shares of Canco (whose only asset is a non-resident subsidiary) in consideration for an obligation of Buyco to cause the issuance of shares of Parent to the public shareholders of Canco. ...

Statements in tax returns that "were not made inadvertently but only made following due consideration and professional advice... constitute statements against interest" (Riviera Hotel). ...

The statements in the Willingale case that discounts did not accrue from day to day may have been influenced by the consideration that the taxpayer bank could, and sometimes did, sell the debt obligations before maturity. ...