Search - consideration

Assessing and Enquiries Directorate initially reviewed the taxpayer's request and has now referred it to us for consideration. ...

For that reason, the Department will concur with the transferor receiving in the interim (in addition to a qualifying share) a right to receive preference shares and will view such a right as being an acceptable form of consideration for the purposes of paragraph 85(1)(e.2) of the Act provided that the preference shares (with the appropriate fair market value) that the right represents are authorized, issued, and in place within the time specified in subsection 85(6) of the Act. ...

You have asked if the Department is prepared to rule on the application of 84.1 if the taxpayer transfers those shares to his holding company under subsection 85(1) for 'boot' consideration equal to his cost and shares of the holding company. ...

You stated that the purchase price of the assets to be transferred as outlined in the agreement will be fair market value and the consideration will be (a) a promissory note equal to the adjusted cost base of the assets being transferred, and (b) a subsequent issue of special shares having a paid-up capital of $1 and a redemption and retraction amount equal to the difference between the fair market value of the assets being transferred and the fair market value of the note. ...

. • an estate freeze is proposed whereby the taxpayer, an individual, will transfer all his shares, being common shares, in Opco to Holdco (both of which are small business corporations) pursuant to subsection 85(1) for consideration consisting of preferred shares of Holdco having an aggregate fair market value equal to that of the Opco common share transferred. • an irrevocable discretionary trust, having an arm's length trustee, will hold all the common shares of Holdco; the settlors of this trust will be the taxpayer and his spouse while the beneficiaries thereof will be the settlors and their children, one of whom is a minor. • should we rule on this type of "estate freeze" since the freezer is a beneficiary of the trust who may at the discretion of the trustee receive any or all of the income of the trust? ...

3 January 1983 Income Tax Severed Letter RCT 55-100 F Unedited CRA Tags 69(1), 55(1), 245(2)(c) Dear: XXX RE:     Non-arm's Length sale under option agreement This is in reply to your letter of January 3 concerning the application of subsection 69(1) of the Income Tax Act (the "Act") to the hypothetical situation wherein a father grants an option in respect of undeveloped land which he owns to his son for $1,000 consideration. ...

After taking into consideration the comments that we have received from persons concerned with our position, we have concluded that a change in our assessing practice along the lines indicated in the Revenue Canada Round Table could provide undesired and unfair results. ...

It is our view that a corporation continued under the ABCA may add to its stated capital any consideration received by it for a share issued but it is not forced to increase its paid-up capital on continuance. ...

While it is conceivable that some taxpayers may argue that he received consideration other than shares in exchange for his common share (see memorandum dated May 8, 1981 attached) I do not foresee the exploitation of our position as an issue of any real significance or one which will be conscientiously recognized by many taxpayers. ...

Newco will issue non-voting, retractable, preferred shares to the U.S. company in consideration of the sale of the subject shares. ...