Search - consideration

If a postmortem pipeline is undertaken with Holdco issuing only a promissory note to the estate as consideration for the Opco shares… Paragraph 212.1(6)(b) deems each beneficiary of the estate to directly dispose of one-half of Opco's shares to Holdco, and to directly receive one-half of the non-share consideration (the promissory note) received by the estate from Holdco… Paragraph 212.1(1.l)(a) deems Holdco to pay a dividend to the non-resident beneficiary equal to the amount by which one-half of the non-share consideration exceeds one-half of the Opco shares' PUC.... ...

. … 2) [A]t the same time, a) In consideration for shares in the capital of Whiting (the "consideration") delivered to the Kodiak shareholders by Whiting on behalf of Whiting Bidco, Whiting Bidco issued shares to Whiting with a fair market value equal to the value of the consideration; and b) Whiting Bidco purchased the outstanding Kodiak shares in exchange for the consideration, to be issued directly by Whiting to Kodiak shareholders on behalf of Whiting Bidco…. 5) Whiting Bidco and Kodiak amalgamated (to form "Kodiak Amalco") "with the same effect as if they were amalgamated under...the BCBCA", "except that the separate legal existence of [Kodiak] will not cease and [Kodiak] will survive the Amalgamation". ...

– Limitations on Expenditures Pursuant to Sections 143.3 and 143.4", 2014 Conference Report, (Canadian Tax Foundation),14:1-36-- summary under Subsection 143.3(2) Summary Under Tax Topics- Income Tax Act- Section 143.3- Subsection 143.3(2) Denial of cost of property acquired with options (p. 14:7) [O]ne of the effects of section 143.3 is that the issuer will not have any cost for property it receives as consideration for granting an option to acquire an interest in the issuer. Avoidance for issuing options for cash (p.14:11) On the premise that section 143.3 should not extend to the issuance of securities for cash, and subject to the possible application of…GAAR…, where options (including section 7 securities) would otherwise be issued for property, consideration could be given to issuing such options for cash and using the cash to purchase the property that was otherwise to be paid for such options. ...

(a) of that definition and a portion of the consideration received by a holder for the Targetco shares is not equity consideration described in para. ...

.-- summary under Paragraph 55(3.2)(h) Summary Under Tax Topics- Income Tax Act- Section 55- Subsection 55(3.2)- Paragraph 55(3.2)(h) Conventional mechanics for butterfly by foreign Pubco of Canco to foreign Spinco caught by s. 55(3.1)(b)(i) (p. 7) Pubco incorporates a foreign corporation (Spinco) and transfers the foreign spin business to Spinco in consideration for Spinco shares. ... Resolution through use of three-party exchange (p. 7) [Under] a three-party share exchange… (1) Pubco transfers its Canco shares to Newco (but Newco does not issue shares to Pubco); (2) Newco issues shares to Spinco in consideration for Newco's acquisition of Canco shares; and (3) Spinco issues shares to Pubco in consideration for Spinco's acquisition of shares of Newco. … Spinco is not a shareholder of Canco at any time in the series, and thus paragraph 55(3.2)(h) does not deem Spinco to be a transferee corporation. ...

[T]he developer will take the position that the capital gain that would otherwise be realized on the sale of the shares of Projectco at fair market value is attributable to income earned prior to the "safe-income determination time"… CRA s. 160 challenges to Projectco transactions (p. 12:13) [T]he manner in which the purchase price is funded could affect the developer's exposure to a challenge to the transaction under section 160 on the basis that property of Projectco has been transferred to the developer for consideration that is less than its fair market value. ... The CRA's basis for the application of GAAR is that the policy behind section 160 is to "prevent a taxpayer from avoiding a liability under the Act by transferring property to a non-arm's-length person for inadequate consideration." ... The provision actually looks not at the consideration received by the transferor, but at the consideration paid by the transferee…. ...

The relevant references to "shares" in the definition of specified property in paragraph 88(1)(c.4) specify shares of the parent that are received as consideration for the acquisition of shares of the target, or shares of the parent that are issued for consideration that consists solely of money.69 Neither of these exceptions will be satisfied if a reference to a share in paragraph 88(1)(c.4) includes an option…. ...

Michael Coburn, "Practical Strategies for Dealing with the Restrictive Covenant Provisions", 2014 Conference Report (Canadian Tax Foundation), 8:1-29-- summary under Paragraph 56.4(7)(d) Summary Under Tax Topics- Income Tax Act- Section 56.4- Subsection 56.4(7)- Paragraph 56.4(7)(d) Requirement of nil proceeds for covenant: tracing issue (p.14) [A] grantor of a Non-Competition Covenant could acknowledge that the consideration for granting the covenant is the beneficiary's agreement to acquire property from the grantor…[for example]: "[T]he Restrictive Covenants are integral to the Purchase Agreement and have been granted to maintain or preserve the fair market value of the Purchased Assets. ... If the "no proceeds" requirement is not met in any situation where proceeds are attributable but not allocated to a restrictive covenant, it would likely never be met insofar as some consideration is always going to be attributable to a restrictive covenant. ...

The consideration paid to the vendors includes CRIC shares, under an earnout arrangement. ... Thus, the share consideration effectively transfers some of the tax burden from the non-resident parent to the vendors. ...

An election under regulation 5907(2.1) has retroactive effect and can never be revoked: therefore, the decision whether to make an election requires careful consideration. The repeal of the ECP regime not only will have an impact on a taxpayer that is deciding whether to make an election under regulation 5907(2.1), but also may have an impact on a taxpayer that already made an election at a time when purchased goodwill was not a relevant consideration. ...