Search - consideration

Would the direct transfer for no consideration of a critical illness insurance policy by Opco (which was the policyholder, beneficiary and had paid all the premiums) to its shareholder (so that the shareholder became the holder and beneficiary) result in the application of s. 15(1)? ... However, in a situation such as described above, the shareholder who received the critical illness insurance policy from Opco for no consideration would generally be required to include the value of the benefit in computing income by virtue of subsection 15(1). ... Question for Finance What are the policy considerations respecting recovering tax on this amount under s. 122(1)(c) at the top marginal rate and the personal liability of the trustees if a final distribution were made following the death? ...

Follow-up question: The area responsible for this information has confirmed that such an option is not under consideration at this time, but it may be reviewed in the future. ... Perhaps a new payment option could be a future consideration. If a self-employed individual finds they consistently need to make a payment on April 30, they can make voluntary instalment payments during the calendar year that they earn the income. ... CRA Response Issue No. 95 of the Excise and GST/HST News provided information on the simplified filing procedures concerning existing elections for nil consideration under section 156 of the Excise Tax Act (ETA). ...

., its CSV of $150), the FMV of the consideration given ($0) and the ACB[FN7: As defined in subsection 148(9)] of the Policy ($50). ... This consideration may be all or any part of the beneficiary's income or capital interest, as the case may be. ... Regarding the consideration given for the interest, in the situation described, since the transfer of the interest in the Policy by Trust X to its beneficiary Xco would be in repayment of the promissory note, the consideration given by the beneficiary would correspond to the amount of the debt repaid. ...

However, the legal relationship between an individual who entrusts his or her money to a financial institution can only be definitively determined on a consideration of all the relevant facts. ... Donor ($200,000), (ii) the FMV of the consideration given for the interest ($0) and (iii) the ACB of the interest to Mr. ... Q.12 $100 per-month late-filing penalty What are the policy considerations for s. 220(3.5) penalties arising on making late elections as permitted in the Minister’s discretion under Reg. 600 and on making them more equitable, particularly for individuals? ...

Preliminary CRA written response The jurisprudence indicates that the word "consideration" is a broad term, which can be either a right, an interest, a profit or a benefit for one party, or a waiver, a disadvantage, a loss or a liability for the other party. ... In the absence of an indication to the contrary in the context, it appears to us that the word "consideration" must, for the purposes of subsection 148(7), receive the broad meaning generally accorded to it in the jurisprudence. ... The Department of Finance Canada is also continually reviewing the Income Tax Act and rules that could be changed through taking into consideration tax policies and competing priorities. ...

Oral Response A file with a similar series of transactions was recently referred to the GAAR committee for consideration. ... I'll mention a couple examples of situations we consider offensive: A situation where you have a redemption of a share in consideration for a note in a reorganization that would be exempt under 55(3)(a), and the note would be used to generates basis that would be in excess of the ACB of the shares being redeemed. ... For example, an exchange of shares would be subject to tax if the amount of the non-share consideration received exceeds the ACB of the shares being exchanged. ...

Official Response 26 May 2016 IFA Roundtable Q. 2, 2016-0642061C6- AOA & Notional Expenses 3) Application of ss. 84(3) and (4) to a functional currency tax reporter Assume a Canadian corporation (“ Issuer ”) that has a US$ “elected functional currency” (“ EFC ”), within the meaning of subsection 261(1), issues for full fair market value consideration preferred shares to a shareholder (“ Shareholder ”) with a redemption value of US$100,000 at a time when US$1.00 = C$1.00. ... Where there is still doubt in a particular situation, including where certain anomalies arise based on these principles, we would invite taxpayers to submit additional questions to us for consideration. ... Just to be clear, the maintenance of legal stated capital in a foreign currency does not change any of these answers, as PUC is fundamentally a Canadian-dollar tax concept, absent functional currency considerations. ...

Could you provide us with an update on Finance’s consideration of this issue or any work being done relating to the possible broadening of the repayment requirement? ... If you accept that there should be a triggering events rule, then an obvious case would be where there is a taxable sale at fair market value for cash consideration, and that would be pretty clear. ... Of course, whether the rules are actually going to apply would depend on whether the linkage test would be met, and that would require consideration of all of the relevant facts and circumstances to determine whether there is sufficient linkage. ...

Question Is the CRA of the opinion that the GAAR applies to this particular series of transactions taking into consideration, among others, the Tax Court of Canada decisions in Evans v. ... CRA Response A file with a similar series of transactions (the “Transactions”) was recently referred to the GAAR Committee for consideration. ... X sold all of his HOLDCO common shares to his children in consideration for promissory notes. ...

This issue is still under active consideration by the CRA. In conducting its review, the CRA must consider the purpose of Form T1135, which is to promote compliance and tax fairness, and to assist the CRA in obtaining information on certain types of assets held by Canadian residents outside of Canada that would otherwise be difficult to obtain. ... If there is consideration attached to the endorsement, in my opinion the profit from it is that of a business as that term is described in section 139(1)(e) [(now defined in section 248(1)]. ... However, the CRA would not generally apply subsection 15(1) solely as a result of the granting of a guarantee where the CRA is of the view that the individual pays the individual’s corporation a reasonable guarantee fee as consideration for the individual’s corporation granting a mortgage guarantee of a personal loan of the individual. ...