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However, a price adjustment clause providing for the issuance of additional shares or cancellation of issued shares without payment in order to adjust the value of the consideration received carries with it a number of legal and technical difficulties that are best avoided from the perspective of both taxpayers involved and the CRA. For instance, events like the winding-up, reorganization or amalgamation of the issuer of the share might make the future exercise of the price adjustment clause difficult or impossible. 1.7 Where the price adjustment clause relates to the issuance of a note or property other than shares in consideration for the transfer of a property, the adjustment to the price may be implemented in a number of ways, including through a change to the principal amount of the note, the issuance of additional non-share consideration, the cancellation of the note or the return of all or part of the non-share consideration. ... If the FMV of the consideration received by the corporation for the issuance of those shares differs from the FMV of the shares, the exercise of the price adjustment clause might have an impact on the determination of the FMV of the shares immediately before the person’s death for purposes of applying subsection 70(5). ...

The rules allow for the recognition of a gift for income tax purposes in certain circumstances where there is a transfer of property for partial consideration. ... It is generally accepted that a transfer is made by gratuitous title when: the transfer impoverishes the donor to the benefit of the donee and is made without any corresponding consideration; and it is the donor's intention to enrich the donee without receiving any corresponding consideration. ... Therefore, a transfer of property for partial consideration may result in a gift under the civil law. ...