Search - consideration

5 October 2022- 10:57pm If commercially feasible, deferred share consideration can be used instead of a share sale occurring on a cash earnout basis Email this Content Some points made on share sale earnouts, or achieving their equivalent without having to address s. 12(1)(g), include: The contingent payment terms can be embedded in the terms of special shares issued by the Canadian purchaser, thereby permitting s. 85(1) rollover treatment, and with a Callco needed in the buyer structure to avoid Pt. ... However, the election form (T2057) creates difficulties in that it refers only to the “share consideration” rather than also including rights to receive shares in that quoted phrase. ...

(f) exclusion from disposition re a transfer for no consideration to new trust for the same special-needs minor beneficiary Email this Content A special-needs minor child (CC4), who was the sole beneficiary of an inter vivos trust for the child’s exclusive benefit, held non-voting Class A common shares of a holding company (Fco), with CC4’s three siblings holding the other Class A shares directly. ... Fco makes a PUC distribution to the trust by distributing a note of a subsidiary in an amount sufficient for the trust to pay the tax on the above taxable dividend. the father of CC4 settles a new trust for the exclusive benefit of CC4, with the old trust transferring its Class Z shares of Fco to the new trust for no consideration, and with the new trust not electing out of the application of para. ...

30 May 2017- 1:14am Lumenpulse privatization contemplates cash consideration for its majority public shareholders and a share-for-share exchange for 38% of its shareholders Email this Content Under the proposed privatization of TSX-listed Lumenpulse pursuant to a CBCA Plan of Arrangement, the public shareholders would receive cash for their common shares, and the specifically-listed “Rollover Shareholders” (holding 38% of the common shares) would receive common shares of the newly-incorporated purchaser, which is an indirect subsidiary of Power Corporation of Canada. ...

11 February 2018- 10:58pm Consideration should be given to avoiding an immediate liquidation of an RESP on death Email this Content A registered education savings plan will form part of the estate of a deceased sole or last subscriber to the RESP. ...

30 May 2018- 12:29am CRA finds that full compensation to a customer who returned goods precluded access to the GST/HST consideration-adjustment rule Email this Content CRA accepts that ETA s. 232 generally applies where a supplier refunds the purchase price of goods that are returned to it by its customer, so that there is no need for the customer to charge GST/HST on the refund payment. ...

28 March 2021- 10:29pm CRA indicates that it will only grant a request in a objection to confirm a GST/HST assessment without consideration in exceptional circumstances Email this Content ETA s. 301(4) provides "where, in a notice of objection, a person who wishes to appeal directly to the Tax Court requests the Minister not to reconsider the assessment objected to, the Minister may confirm the assessment without reconsideration.” ...

2 November 2025- 4:05pm CRA finds that a conditional contractual obligation to issue shares in consideration for a cash advance might be subject to s. 49.1 on the share issuance Email this Content A SAFE (“Simple Agreement for Future Equity”) is a financing agreement in which an investor provides funds to a company in exchange for the right to receive shares upon the occurrence of a future event, generally a future financing or a winding-up event, at a preferential price. ...

11 July 2025- 12:05am CRA indicates that the vendor’s agreed reimbursement of the sold corporation’s legal costs of a failed suit in consideration for a dividend had the suit succeeded, likely was non-deductible Email this Content An individual agreed to sell all the shares of a corporation except that he also agreed with the purchaser that he would retain a preferred share in that corporation on which he would receive a dividend equal to a percentage of any damages award to the corporation in its action against a 3 rd party for lost profits – but that if the law suit was unsuccessful, he would reimburse the corporation for certain of its legal fees. ...

16 May 2019- 1:47am Joint Committee suggests issues for consideration in drafting the new employee stock option restriction rules Email this Content The Joint Committee has provided comments on the 2019 Budget proposals to align Canada’s employee stock option rules with those in the U.S. through applying a $200,000 annual cap on employee stock option grants (based on the fair market value of the underlying shares) that may receive tax-preferred treatment for employees of large, long-established, mature firms (i.e., the s. 110(1)(d) deduction). ...

16 February 2022- 11:17pm The new s. 18.2 interest-limitation rules require careful consideration before their implementation Email this Content Observations on the draft s. 18.2 rules (supplemented by the elective rules in draft s. 18.21) for limiting a taxpayer’s interest and financing expenses net of its interest and financing revenues that are deductible in computing its income to a fixed ratio (ultimately 30%) of the taxpayer’s adjusted taxable income (“ATI”) (essentially, tax-basis EBITDA) include: It is unclear whether the rules apply to computing the income of a foreign affiliate, which is generally deemed by s. 95(2)(f) to be a Canadian resident for FAPI-computation purposes “except to the extent that the context otherwise requires.” ...