Search - consideration

Canco subsequently sells the shares of Subco to Parent for fair market value consideration. ... FA then assigns the loan to Canco 2, another Canadian-resident corporation, which is related to Canco 1, for fair market value consideration (without any novation of the loan). ...

.: 1) Cansub establishes Forco in a jurisdiction that has an income tax treaty with the United States and Canada. 2) Cansub transfers the US Opco loan to Forceco as consideration for shares of Foreco. 3) The Cansub loan is amended to add a conversion right… 4) Can LP exercises the conversion right and converts the Cansub loan into preferred shares of Cansub having a redemption and liquidation value equal to the outstanding amount under the loan, converted into Canadian dollars on the date of the conversion.... ... As a result of the significant appreciation in the value of the US dollar…the repayment of the loan in cash by Forco would result in a capital gain in the hands of Canco under 39(1).... 1) Cansub assumes the loan as consideration for a cash payment by Forco equal to the amount outstanding under the loan. ...

.-- summary under Subsection 191(4) Summary Under Tax Topics- Income Tax Act- Section 191- Subsection 191(4) CRA interpretation of specified amount (pp. 877-8) [I]n a hybrid transaction in in which a redemption of the shares will trigger a deemed dividend, a specific exemption in subsection 191(4) will treat the deemed dividend as an excluded dividend, to exempt the deemed dividend where the specified amount for which the shares are redeemed does not exceed the fair market value of the consideration for which they were issued. ...

Accordingly, given that the relief afforded in subsection 143.4(3) may not be of assistance if a property is no longer owned at the time of payment, planners may wish to give consideration to having amounts paid up-front… ...

Xiao, "The 88(1)(d) Bump – An Update", 2013 Conference Report (Canadian Tax Foundation), pp.13:1-60-- summary under Paragraph 88(1)(c.9) Summary Under Tax Topics- Income Tax Act- Section 88- Subsection 88(1)- Paragraph 88(1)(c.9) Options granted by virtue of employment not part of series (p. 13:29) [A] stock option granted to an employee by Bidco or Bidco's Canadian parent after closing to acquire shares would not be covered by new paragraph 88(l)(c.9) as such an option is not issued in consideration for the acquisition of options of Target. ...

Scott Wilkie, "Relieving and Clarifying Changes to Canadian Bump Rules", Corporate Finance, Volume XVIII, No. 3, 2012, p. 2130 at 2132:-- summary under Subparagraph 88(1)(c.4)(ii) Summary Under Tax Topics- Income Tax Act- Section 88- Subsection 88(1)- Paragraph 88(1)(c.4)- Subparagraph 88(1)(c.4)(ii) Indebtedness issued for money is specified property – this rule now confirms, from and after 2001, that indebtedness issued solely for consideration consisting of money will not generally cause a bump problem if acquired by restricted persons. ...

., the issuance by Canco of options in consideration for options or shares of Target, or the acquisition by Canco of Target options in exchange for Canco shares or indebtedness) will not create any additional bump risk. ...

Although no renunciation of a relevant expenditure is permitted unless the PBC actually issues a share or right to a share, nothing prevents a PBC and a FTS subscriber from executing a subscription agreement before any consideration is paid to the PBC or the FTS is issued. ...

If no other strategy is feasible, consideration should be given to minimizing the risk that a "series of transactions" will be found…. ...

[fn 122 For example, what happens if there is contingent future consideration? ...