Search - consideration

The Queen, [2006] GSTC 103, 2006 TCC 437-- summary under Subsection 141.01(1.1) Summary Under Tax Topics- Excise Tax Act- Section 141.01- Subsection 141.01(1.1) lease consideration not nominal because of property tax obligation After having incurred substantial GST in acquiring a transit system for exempt use, the appellant commenced to lease the system to another municipal transit entity for rent of $1 per year, but with the lessee being obligated to pay municipal taxes imposed on the leased premises (which amounted to around $2 million per year). In finding that this lease represented a supply of the system for consideration other than nominal consideration (so that there was a change of use under ss. 209(2) and 199(3) entitling the appellant to recover the basic tax content of this asset), C Miller J noted that if he accepted the appellant's position that "nominal is trifling or such an amount that it is immaterial whether or not it is paid, the answer is self-evident – several million dollars are not nominal [and] there is no evidence that [the lessee] ever intended not to pay the property taxes" (para. 55), and went on to state (at para. 56) that even "interpreting ‘nominal' on a relative basis, that payment of the property taxes…is not nominal. ...

C Miller J found that this lease represented a supply of the system for consideration other than nominal consideration (so that there was a change of use under ss. 209(2) and 199(3) entitling the appellant to recover the basic tax content of this asset), on the basis that the municipal tax obligation represented valuable consideration. ...

" The Minister argued that the fines were consideration for a taxable supply (being the provision of parking services) and therefore were subject to GST or, in the alternative, that they were subject to GST under s. 182 on the basis of a breach of contract for those parking services. ... The fines were pure fines rather than consideration for parking services. ... C Miller J stated that a non-paying driver does not agree to pay a fine as consideration for the supply of the parking spot- "the agreement is basically, if I get caught I pay a fine. ...

The Queen, 2015 TCC 278-- summary under Section 138 Summary Under Tax Topics- Excise Tax Act- Section 138 s. 138 did not apply where the allocation of consideration among the components was apparent The appellant, which was a for-profit operator of a B.C. residential care home, was invoiced periodically, based on an flat hourly rate, by a third-party independent contractor ("HARPS") for the services of its "care aides" (who performed personal services and provided assistance to residents with the activities of daily living), and "activity aides" (who focused on social activities for the residents and whose time represented 5.4% of the total). ... He stated (at paras. 75-6): [T]he method of invoicing the activity aide and care aide supplies does not result in those services being provided for a single consideration. ... Therefore, the consideration for each category of worker would be determinable and separate amounts. ...

The Queen, 2006 DTC 2376, 2006 TCC 44-- summary under Subsection 245(4) Summary Under Tax Topics- Income Tax Act- Section 245- Subsection 245(4) surplus stripping The taxpayer, who held 14.28% of the common shares of a Canadian private corporation ("Consercom") transferred a 9.76% block to a wholly-owned holding company ("6311") in consideration for preferred shares of 6311 with a high paid-up capital (thereby giving rise to a capital gain eligible for the capital gains exemption). The taxpayer also transferred shares of a Canadian private corporation ("Gestion") that he owned together with his brother to 6311 in consideration for shares of 6311. ... After finding that s. 84.1 was intended to prevent the stripping of surpluses of an operating company, that although Parliament had assumed that a shareholder with less than a 10% block of shares would not be able to strip the surpluses of that company, such influence could be exercised when two related shareholders held all the shares of a company (Gestion), and that there would not have been an abusive transaction if the taxpayer had transferred to 6311 only the Consercom shares, Archambault J. found that there was an abuse here where 6311 used the surpluses from Gestion to redeem the preferred shares that had been issued in consideration for the Consercom shares. ...

The Queen, 2012 DTC 1019 [at at 2575], 2011 TCC 520-- summary under Ownership Summary Under Tax Topics- General Concepts- Ownership presumption of resulting trust where property transfer for no consideration Seeking to protect herself from being sued by her brother, the taxpayer transferred title to all her real properties for no consideration to corporations under her majority control. ... Hogan J. noted (para. 30) that "a transfer of property for no consideration generally results in a rebuttable presumption of a resulting trust". ...

The Queen, 2012 DTC 1019 [at at 2575], 2011 TCC 520-- summary under Disposition Summary Under Tax Topics- Income Tax Act- Section 248- Subsection 248(1)- Disposition rebuttable presumption of resulting trust on transfer for no consideration Seeking to protect herself from being sued by her brother, the taxpayer transferred title to all her real properties for no consideration to corporations under her majority control. ... Hogan J. noted (para. 30) that "a transfer of property for no consideration generally results in a rebuttable presumption of a resulting trust". ...

D’Arcy J found that the Annual Resort Fees were consideration for a service rather than intangible personal property, stating (paras. 237-8): The Appellant does not provide any rights in consideration of the Annual Resort Fee. … What it supplies is the agreement to use the Annual Resort Fees to fund its operations. … This…is the supply of something other than property. The Annual Resort Fees were "not part of the ongoing consideration the Members....pay to maintain their membership in the Appellant" given inter alia that the memberships were supplied by a different entities (the "Developers" who also had acquired occupancy rights to the Vacation Homes and had sold the Resort Points giving members the rights to book stays at the homes). ...

The Agreement provided that the fees of AC were payable by CIBC “in consideration of AC referring or arranging for Aeroplan members and other members of the public to make Card Applications and in consideration of AC performing its other obligations herein which are incidental to the foregoing.” ... …[T]here is no evidence that CIBC would have been prepared to pay consideration to Aeroplan for any of the separate elements on their own, and Aeroplan issued invoices to CIBC in respect of its “participation in the Aeroplan Program” for each of CIBC’s credit cards, generally computed with reference to the number of Aeroplan Miles issued during the relevant billing period. ...

The Queen, 95 DTC 311, [1993] 2 CTC 3125 (TCC)-- summary under Subsection 80(1) Summary Under Tax Topics- Income Tax Act- Section 80- Subsection 80(1) promissory note enforceable A promissory note that the taxpayer had given as consideration for a limited partnership interest acquired by him was found to be a legally enforceable claim of the banks to which it had been assigned. Accordingly, the release of the taxpayer's obligations under the promissory note in consideration for the payment of a lower cash amount gave rise to the application of s. 80(1). ...