Search - consideration

9 November 2017- 11:26pm CRA stretches out the timeline for implementing a pipeline Email this Content CRA has provided the usual rulings for a pipeline transaction in which the estate sells a company with a “business” of investing and trading in marketable securities to a Newco for consideration comprising mostly a note, followed by an amalgamation of the two companies and the repayment by Amalco to the estate or beneficiaries of the note over time. ...

7 January 2018- 5:59pm CRA finds that a corp. held 50-50 by two 100% grandchildren of A was closely related for ETA purposes to A and to another 100% grandchild of A Email this Content One of the requirements for the ETA s. 156 nil consideration election is that the parties be closely related. ...

Although this may serve as a useful starting point to begin consideration of the value of IP, courts have been reluctant to accept this methodology. ...

Under the Gabco test, a salary is unreasonable if “no reasonable businessman would have contracted to pay such an amount having only [his] business considerations … in mind. ...

9 April 2018- 12:33am The proposed Leagold acquisition of Brio Gold entails the Brio Gold shareholders receiving warrants on Leagold shares on a rollover basis Email this Content The proposed acquisition of Brio Gold by Leagold under an Ontario Plan of Arrangement would entail Brio Gold first issuing 2-year warrants on its shares for nil consideration to all its shareholders (with that issuance not being a shareholder benefit based on the s. 15(1)(c) safe harbour) and then the Brio Gold shareholders exchanging their shares and warrants for shares and warrants of Leagold on a rollover basis under ss. 87(4) and (5) under a s. 87(9) triangular amalgamation (also occurring under the Arrangement) of Brio Gold with a Newco sub of Leagold. ...

In particular, its FX exposure on the loan would be crystallized if a wholly-owned sub of Canco 1 agreed to undertake to repay the loan on maturity in consideration for issuing an equivalent Canadian-dollar note to Canco 1. ...

As it also noted that it had previously taken the position that Bitcoins do not come within the items specifically listed in the ETA definition of “money,” namely currencies and credit instruments or devices such as cheques, promissory notes, letters of credit and bills of exchange or “other similar instrument,” its consideration of whether payment using crypto-currencies is an exempt financial service likely is focusing on whether crypto-currencies are “money” within the undefined meaning of that word. ...

This approach might inform a consideration of the minimum standards in the MLI that specifically condemn double non-taxation and treaty shopping and provide a principal purpose general anti-abuse test (“PPT”). ...

22 October 2018- 12:36am CRA indicates that more gain will be realized if an appreciated life insurance policy is distributed as redemption proceeds rather than a dividend-in-kind Email this Content 2017-0690331C6 found that a dividend-in-kind by a subsidiary to its parent of a life insurance policy would result in proceeds of disposition to it equal to the greater of the policy’s cash surrender value (CSV) and its adjusted cost basis (ACB), rather than equaling the policy’s higher fair market value (FMV), given that the dividend would not result in consideration being given for the policy. ...

1 November 2018- 1:04am CRA found that the covenant of the assuming debtor to pay accrued interest on a debt assumption was a payment in kind subject to Part XIII tax Email this Content As part of the consideration for the drop-down of the assets of a Canadian partnership (whose partners were Canco and its wholly-owned Canadian subsidiary) to a wholly-owned U.S. subsidiary (“Debtor Affiliate”), Debtor Affiliate assumed the loan including accrued interest thereon that had been owing by Partnership to another Partnership subsidiary (“Creditor Affiliate”), and Creditor Affiliate released the Partnership from its obligations under the Loan. ...