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CRA indicated that there was insufficient information to determine whether the deduction of the IMFs represented the payment of charges by the pooled funds (viewed as segregated funds that were deemed to be separate trusts by ETA s. 131) to the insurer (in which event such charges would be subject to GST/HST pursuant to s. 131(1)(c)(i)), or whether the IMFs were merely an element in computing the unit value of the pooled funds, so that they were not consideration for any supply. However, under either interpretation, the employer was not acquiring investment management services under the policies, nor paid GST/HST on any consideration therefor, so that no input tax credits were available to it. ...

Perram and Jackman JJ found that, since as a matter of contractual interpretation, all of the amounts paid by the Bottler to the Seller were consideration for the sold concentrate, none of such payments could be treated as a trademark royalty that was subject to Australian withholding tax. ... Accordingly, the Commissioner’s assessment of Australian withholding tax on a portion of the consideration was reversed. ...

Under CRA’s arrangement made in 1991 with the Canadian Dental Association, a dentist registrant could, for each reporting period in a fiscal year, use an estimate up to a maximum of 35% of the total consideration charged for orthodontic treatments to represent the consideration for the supply of orthodontic appliances, and claim ITCs on that basis – but then, at the end of the fiscal year, was required to perform a reconciliation based on the actual amounts charged for orthodontic appliances, and adjust the ITC claims for the year accordingly (keeping in mind that charges for cosmetic services also generated ITCs). ...

9 February 2025- 11:20pm CRA finds that licence fees received from a registrant for worldwide rights to use copyright were fully subject to GST/HST Email this Content A registered resident individual who carried on a business of producing videos entered into an agreement with a Canadian “Web Publisher” under which the individual granted the Web Publisher the worldwide right to distribute and reproduce the videos in consideration for a percentage of the revenues generated. ... In finding that all the consideration paid by Web Publisher to the individual was subject to GST/HST pursuant to ETA s. 142(1)(c), which deems a supply of intangible personal property to be made in Canada if it may be used in whole or in part in Canada, CRA stated: [T]he rights are granted on a worldwide basis, without any restrictions on where they may be used, from which we conclude that they may be used in Canada. ...

13 April 2025- 11:25pm CRA rules on a split-up butterfly between a divorced couple where excess debt is allocated to land rather than building to produce capital gains treatment Email this Content In order to accomplish a multi-wing split-up net asset butterfly of a private corporation (DC) owned by a divorced couple, they will transfer their common shares of DC to two new transferee corporations (TC1 and TC2), then DC will distribute each of the two rental properties, along with cash assets, to the respective TC in consideration for the assumption of liabilities (including shareholder advances and mortgage debt) and the issuance of TC preferred shares. ... The sole consideration for the cash transfers will be debt assumptions, the buildings will be transferred on a full s. 85(1) rollover basis (i.e., debt assumed only up to their cost amounts, so that there is no recapture) and the balance of the assumed debt will be allocated to the transferred land so that the agreed amount therefor will produce (consistently with s. 85(1)(e.3)) the recognition of capital gains by DC (and resulting Part IV tax under s. 186(1)(b) to the TCs on the DC winding-up.) ...

Under the proposed transactions: the estate transfers all its shares of Opco on an s. 85(1) rollover basis to Newco in consideration for a demand note and Class B non-voting, non-cumulative preferred shares of Newco. each of the children, who are equal beneficiaries, transfer their preferred shares and common shares of Opco on an s. 85(1) rollover basis to Newco in consideration for Class C non-voting, non-cumulative preferred shares of Newco. at least 12 months later, Newco and Opco amalgamate, with the note then being repaid on a quarterly basis over a minimum period of one year, with Amalco then being wound up into the estate. ...

24 September 2025- 12:30am D'Arcy – Tax Court of Canada finds that a use of PUC-averaging to increase the PUC of individuals’ shares with a stepped-up ACB was abusive Email this Content The taxpayers (a couple) transferred their shares of Opco to a new holding company in consideration for preferred shares of Holdco at s. 85(1) agreed amounts that used up lifetime capital gains exemption balances. ... However, they also caused Opco to transfer significant assets to Holdco on an s. 85(1) basis in consideration for Holdco preferred shares of the same class, so that with PUC-averaging, the PUC of the taxpayers’ shares increased. ...

12 October 2021- 10:30pm Creditors wishing to acquire the assets of a debtor in CCAA proceedings may weigh the respective merits of a credit bid or reverse vesting transaction Email this Content Under a credit bid, which allows existing secured creditors to bid up to the full face amount of their secured debt claim as currency for the acquisition of the debtor’s assets, the secured debt may be transferred by the secured creditors to a newly-established “CreditBidCo” in consideration for equity, so that CreditBidCo then acquires the debtor’s assets (and assumes some operating liabilities), with the full amount of its secured debt claim being extinguished. ... Greater certainty on s. 79 not applying may be achieved with a three-party arrangement under which CreditBidCo would directly acquire the debtor’s assets, and in consideration it would issue its shares to the secured creditors who would agree to the extinguishment of their debt claims against the debtor. ... Summaries of Janette Pantry, Carrie Smit, "Tax Considerations in Restructuring under the Companies’ Creditors Arrangement Act", draft 2020 CTF Annual Conference paper under s. 128(1)(g), s. 80(1) – forgiven amount, s. 80(1) – forgiven amount- para. ...

The rule under s. 160(5)(c) (deeming there to be a net property transfer to the current or future tax debtor under s. 160(1)(e)(i)) is deficient in that it should: include the benefit of substituted property for the consideration received, and any property received by the transferor by virtue of the ownership of such property (otherwise than as proceeds of disposition), refer to valuation at end of the series rather than throughout the series, not be adversely engaged due to FMV fluctuations from external factors such as stock market trading or FX fluctuations, and not be engaged where there is a cancellation of the debt or other securities received that represents a payment for value. For example, there should not be considered to be a deemed depletion of value if: Shares of a corporation (Holdco) purchased for FMV consideration by the future tax debtor from the non-arm’s length (NAL) seller become worthless as part of the series due to a dividend-in-kind by Holdco to such future tax debtor of all its assets (i.e., shares of Opco); or The tax debtor assigns a note, equaling the FMV of assets sold by it to the NAL purchaser, to that purchaser’s parent, for FMV consideration, followed by a cancellation of that debt on a s. 88(1) wind-up. ...

W4N sold its intellectual property, goodwill and some of its other business assets to EMC for consideration including two “capital dividend” notes totaling $22 million (which were later distributed) and a “Balance Note” for $19.75 million. Souty and the holding company for Foix (Virtuose) sold special voting shares of W4N to EMC Canada for nominal consideration so as to effect an acquisition of control of W4N. The balance of the shares of W4N now were sold directly, or through a sale of shares of Virtuose, to EMC Canada for cash consideration of around $14 million. ...