Search - consideration

In this case the issue was resolved by the trial judge as follows, Appeal Book, p. 290; [1979] C.T.C. 296 at 303: Although Defendant has an acceptable explanation as to why he took nominal sums which he required for living expenses out of the company as repayment of loans rather than as salary — Namely that the company’s affairs were so precarious when he again took over that the bank might well call its loans, putting the company into bankruptcy unless it could begin to show a profit, and I am satisfied that the tax considerations did not enter into his mind, nevertheless I am forced to the conclusion that although, at the time of the acquisition, assignment of the loans to him was of little interest to him and not a primary consideration for his reacquisition of the business, the acquisition of these loans by such assignment cannot be considered as a capital investment by him (even if he had paid some nominal sum for them) but must be considered as part and parcel of the acquisition of the business. ... A more decisive consideration seems rather to have been that in the paragraph which immediately follows at 187 D.T.C.: (e) Finally, respondent's gain cannot properly be considered as having arisen fortuitously. ... Here, as the above passage from his reasons shows, the trial judge found that (1) "the tax considerations did not enter into his [appellant’s] mind” and (2) "at the time of the acquisition, assignment of the loans to him was of little interest to him and not a primary consideration for his reacquisition of the business.” ...

Amounts in part consideration for position of property.—Where an amount can reasonably be regarded as being in part the consideration for the disposition of any property of a taxpayer and as being in part consideration for something else, the part of the amount that can reasonably be regarded as being the consideration for such disposition shall be deemed to be proceeds of disposition of that property irrespective of the form or legal effect of the contract or agreement; and the person to whom the property was disposed of shall be deemed to have acquired the property at the same part of that amount. ... He acknowledged that when the purchaser proposed the breakdown contained in the interim agreement amendment, he gave extensive consideration to the effect of any counter-proposal on his part and concluded that it might put the transaction at risk. ...

As a result of the calculation used by the Appellants, as set out in paragraph 6 above, the Appellants did not include the value of the FST or GST New Housing Rebates as part of the consideration for the sale of the new homes. 8. ... The issue which this Honourable Court must decide is whether or not the FST (where applicable) and GST New Housing Rebates which were assigned/transferred by the purchasers to the Appellants formed part of the value of consideration for the supply of the new homes. ... At my invitation during the conference call to make representations in the present matter, counsel for the Appellants did not attempt to distinguish the issue in the present cases from that considered by the Federal Court of Appeal in the Trengrove case mentioned earlier. [6] Judge Rip had decided in the Trengrove case that the new Housing Rebates, on account of FST and GST, which had been transferred to the builders formed part of the consideration that was subject to GST. [7] I am of the opinion that the decision of the Federal Court of Appeal is applicable to the present appeals, the issue being the same in both sets of cases. [8] I therefore come to the conclusion that the FST and GST new Housing Rebates which were assigned/transferred to the Appellants herein formed part of the value of consideration for the supply of the new houses. [9] Accordingly, the appeals from the assessments are dismissed with costs. ...

The Minister of National Revenue ("Minister") assessed the Appellant by Notice dated July 29, 1997 and further reassessed by Notice dated June 18, 1999 for unreported GST payable for the quarterly periods from January 28, 1993 to December 31, 1996. [4] The issues the Appellant appeals to this court are whether the Minister properly reassessed the Appellant for failure to collect and remit GST with respect to the consideration for multiple supplies in the amounts of $2,944 and $2,917 for the 1995 and 1996 taxation years respectively, and whether the Minister properly assessed interest and penalties. [5] The basis of the Appellant's appeal is that he disagrees with the apportionment of the consideration related to the zero-rated supply (raw materials) and the taxable supply (services, equipment, storage, work space, etc.) that resulted from the Minister's audit. [6] The apportionment of the consideration was determined at the audit to be 50% related to the supply of zero-rated items and 50% related to the supply of items taxable at 7%. This increased the Appellant's GST payable in the amounts of $2,944 and $2,917 for the quarterly reporting periods from January 1, 1995 to December 31, 1995 and from January 1, 1996 to December 31, 1996, respectively. [7] Subsection 165(1) of the Act states that every recipient of a taxable supply shall pay a tax of 7% of the value of the consideration for the supply. ... As a result, a vendor who sells zero-rated goods or services is not required to charge tax on the sale price to his customers, yet will be entitled to claim an input tax credit for GST/HST paid on purchases used in making zero-rated supplies. [8] Subsection 153(2) requires consideration for multiple supplies to be allocated “reasonably” among the supplies. ...

Klundert and whether any consideration had been provided by Ann Klundert for the deposits that were made to her account. [5]                The Tax Court Judge found that the deposits made to Ann Klundert’s bank account were transfers made to her by Dr. ... Therefore, in order for the limiting amount to the amount based on the fair market value of the property transferred, the amount of the consideration given by Ann Klundert would have to be in excess of $800,000. In light of this, Ann Klundert did not pursue her arguments related to the consideration. [8]                As a result the appeal will be dismissed, with costs. ...

Can you tell us, madam, what was the consideration you paid at that time for these shares? ... In his submission, this debt was the consideration paid by the appellant to Mr. ... The market value of the property transferred thus exceeded the consideration by $21,888.03. ...

They read as follows: [TRANSLATION] (a) on August 23, 1993, Marcel Deroy sold the appellant the principal residence located at 19 Rue Dorion in Val D’Or for $66,207; (b) on August 23, 1993, Marcel Deroy also sold the appellant his cottage located on range A of La Pauze township for $10,000; (c) when he purchased the above-mentioned property, Marcel Deroy was single; (d) at the time of the sales, the appellant was married to Marcel Deroy; (e) at the time of the sales, the fair market value of the residence was $80,600 and that of the cottage was $22,800; (f) moreover, Marcel Deroy owed $8,954.56 in taxes when the sales in question were made; (g) at the time of those sales, the appellant was related to Marcel Deroy, since she was his spouse; (h) the fair market value of the immovable property sold was greater than the consideration paid by the appellant, and the difference between the fair market value and that consideration is at least equal to Marcel Deroy’s tax liability; (i) the appellant is jointly and severally liable with the transferor for the payment of the $8,954.56 tax liability of the transferor of the property referred to above. [3] When the appeal was heard, counsel for the appellant admitted subparagraphs (a), (b), (d), (e) and (g), denied subparagraphs (c), (h) and (i) and said he had no knowledge of subparagraph (f). [4] At the hearing the appellant and her spouse Marcel Deroy ("Deroy") testified as follows: Deroy was severely injured in a work-related accident in 1992 that prevented him from working. ... The question that remains is whether the fair market value of the house and cottage exceeded the consideration given by the appellant by at least the amount of $8,954.56 set out in the assessments under appeal, as contemplated in section 160 of the Act. [7] I have had the opportunity to study the authorities and case law submitted to me by both counsel. ... The appellant is liable for the amount of $8,954.56 pursuant to section 160 of the Income Tax Act, having failed to establish that the fair market value of the properties did not exceed the consideration given by her by at least the amount of $8,954.56. [9] Accordingly, the appeal is dismissed. ...

For the purposes of this Act, money constitutes property;   (c)        at the time the property was transferred to the Appellant, the fair market value of the property so transferred was $126,000;   (d)        the Appellant provided no consideration for the property transferred from the Transferor; and   (e)        at the time the Transferor transferred property to the Appellant, the Transferor was liable to pay tax, penalty and interest amounting to $20,204.23.   10.       ...   [3]    With respect to the Minister’s assumption in paragraph 6(e) of the Reply that the Appellant gave no consideration for the $126,000, the Appellant states in the Notice of Appeal as follows:   I don’t believe I owe any money because the money that I received was to pay back my relatives that I had borrowed money from for the business starting in 1984. ... Further, there was no satisfactory evidence that the Appellant gave consideration for the transfer of $126,000 or that the Corporation owed the Appellant any monies. ...

  [3]              The conditions to be met for subsection 325(1) of the Act to apply are the following:   i)                    there must be a transfer of property,   ii)                 the transferor and transferee must not be dealing at arm’s length,   iii)               there must be no consideration or inadequate consideration flowing from the transferee to the transferor, and   iv)               the transferor must be liable to pay an amount under the Act for the reporting period that includes the time at which the property was transferred or any preceding reporting period ...   [5]              I wish to point out immediately that the Minister of National Revenue (the “Minister”) did not allege in the Reply to the Notice of Appeal that there was no consideration or inadequate consideration flowing from the appellants to the Corporation. Consequently, I am of the opinion that the burden of proof regarding consideration rested on the respondent ...

Subsequent to the filing of the statement of defence certain documents incidental to the transfer of the property were eventually produced, such as a chattel mortgage and a promissory note as a consideration for a sale. ... Under section 3 section 2 (which provides that a conveyance made to defeat creditord is void as against such persons and their assigns) does not apply to property conveyed upon good consideration and bona fide to a person without knowledge at the time of the conveyance of the intention to defraud. Thus where a conveyance is made upon good consideration the onus is to show the fraudulent intent of both parties to the conveyance. ...