Search - consideration

Jim Samuel, "Interaction of the Foreign Affiliate Surplus and Safe-Income Regimes: Selected Anomalies, Issues, and Planning Considerations", Canadian Tax Journal, (2018) 66:2, 269-307-- summary under Paragraph 55(5)(d) Summary Under Tax Topics- Income Tax Act- Section 55- Subsection 55(5)- Paragraph 55(5)(d) Increasing the tax-free surplus balance for s. 55(5)(d)(i) purposes through Reg. 5907(2.1) election (p. 294) [G]enerally, if a regulation 5907(2.1) election is made,…at a time when the accumulated depreciation for financial statement purposes is less than it is for tax purposes, the affiliate's earnings (and thus its exempt surplus pool, and ultimately its TFSB) will be increased by the difference between these amounts…. ...

Court found that the translation date therefore should be this issuance date (p. 5) [T]he Court held that the translation date should be the date when the consideration for the common shares was received by Agnico. ... This is when the true consideration for the issuance of the Common Shares was received by Agnico. ... Koffyfontein instead found that the consideration paid for shares on debenture conversion is to be determined at that conversion time, not the debenture issuance date The UK Court of Appeal's decision in Mosely v. ...

Cost considerations v. preparedness (p.2) Cost considerations may lead many entities not to file Schedule 130 and perhaps to not even complete the calculations for their internal records. ...

Michael Coburn, "Practical Strategies for Dealing with the Restrictive Covenant Provisions", 2014 Conference Report (Canadian Tax Foundation), 8:1-29-- summary under Subsection 56.4(2) Summary Under Tax Topics- Income Tax Act- Section 56.4- Subsection 56.4(2) Enforceability of restrictive covenant if no allocation of consideration (pp. 4-5) [T]here may be a perception that to ensure the legal enforceability of a restrictive covenant it is necessary to allocate significant proceeds to the grant of the restrictive covenant. ...

.-- summary under Canadian Resource Property Summary Under Tax Topics- Income Tax Act- Section 66- Subsection 66(15)- Canadian Resource Property Farm-out coupled with transfer for consideration (p. 664) CRA Document 2011-0420451E5 (F) (November 22, 2011) is a recent external technical interpretation in which the CRA considered another situation involving a farm-out as part of a larger overall transaction. ...

Amendment requiring that share consideration be of the receiving FA (p. 6) An amendment to Reg. 5907(2.01)(a) adds a requirement that the shares received by the disposing affiliate as consideration for the packaged assets be shares of the receiving affiliate. Amendment to accommodate assumption of ordinary-course debt (p. 6) A second amendment allows the consideration received to include “the assumption by the other affiliate of a debt or other obligation owing by the particular affiliate that arose in the ordinary course of the business of the particular affiliate to which the affiliate property relates.” This reflects a delayed reaction to 2014-0550451E5, which found that the requirement for relief under the current version, that the "only consideration received in respect of" the drop-down is shares of the new foreign affiliate, will not be satisfied if the new foreign affiliate assumes any liabilities of the transferor FA as part of the purchase. ...

Tax considerations (pp. 12-13) Tax considerations include: Leaving aside the PEO relationship, the foreign entity will often in fact be carrying on business in Canada, under Canadian common-law principles or under s. 253 (which includes reference to orders solicited or anything offered for sale through an agent or servant). Although many non-resident companies claim that they have no employees in Canada because their arrangement with the PEO is instead a contract for services, this position may be less tenable where stock options and other equity consideration are provided as part of the compensation package. ...

Ian Crosbie, "Recent Transactions of Interest, Part I", 2015 CTF Annual Conference paper-- summary under Subparagraph 88(1)(c.3)(i) Summary Under Tax Topics- Income Tax Act- Section 88- Subsection 88(1)- Paragraph 88(1)(c.3)- Subparagraph 88(1)(c.3)(i) Application of substituted property rules where consideration paid to target (Kodiak) shareholders was over 10% of shares of U.S. acquiror (Whiting) (p. 15:7) [T]he consideration provided to Kodiak shareholders consisted of shares of a U.S. corporation, which do not qualify as specified property under paragraph 88(1)(c.4) for the purposes of the substituted property rules in paragraph 88(1)(c.3). ...

.-- summary under Subsection 248(10) Summary Under Tax Topics- Income Tax Act- Section 248- Subsection 248(10) Pre-butterfly transaction whose structure or timing is affected by considerations relating to the butterfly is in contemplation thereof (p. 14:10) It is not our view that property will necessarily be considered to have become property in contemplation of a subsequent butterfly reorganization merely because it is intended, at the time the property becomes property of the particular corporation, to carry out the butterfly reorganization; instead, there must be some connection between the acquisition and the later reorganization. ... Where, however, the structure or timing of a transaction that occurs before a butterfly reorganization is affected by considerations relating to the butterfly reorganization, we would normally consider the transaction as being in contemplation of the butterfly reorganization. ...

Herbert, "Trusts Holding Shares For Employees", draft 2023 CTF Annual Conference paper-- summary under Subsection 15(2.5) Summary Under Tax Topics- Income Tax Act- Section 15- Subsection 15(2.5) Considerations for structuring a market maker trust (pp. 40-43) Given the specified employee rules, market maker trusts are commonly used in larger organizations with extensive share ownership by employees, rather than more closely-held entities. ...