Search - consideration

The loan was guaranteed by X1, X2, Y1, Y2, Z and Numco, none of whom received consideration for the guarantee. ...

" Technical Notes dated May 9, 1985 issued by the Minister of Finance, (page 101) indicate that paragraph 248(8)(a) of the Act was enacted to ensure that a roll-over under subsection 70(9) of the Act would be available where consideration has been paid by a beneficiary to a deceased's estate in satisfaction of the terms of a testamentary instrument. ...

New subsection 245(4.1) of the general anti-avoidance rule (“GAAR”) provides that if an avoidance transaction is significantly lacking in economic substance it is an important consideration that tends to indicate that the transaction results in a misuse or abuse under subsection 245(4). ...

Le revenu imposable et le capital imposable utilisé au Canada des sociétés remplacées pour l’année d’imposition qui s’est terminé immédiatement avant la fusion ne doivent pas être pris en considération aux fins des alinéas 157(1.3)b) et 157(1.4)b) de la Loi afin de déterminer si la nouvelle société se qualifie à titre de PSPCC puisque cette société est réputée être une nouvelle société et que les sociétés remplacées sont réputées avoir cessées d’exister. ... Par ailleurs, le revenu imposable et le capital imposable utilisé au Canada d’une filiale pour l’année d’imposition de sa liquidation doivent être pris en considération aux fins des alinéas 157(1.3)b) et 157(1.4)b) de la Loi afin de déterminer si la société mère se qualifie à titre de PSPCC puisque la société mère et la filiale sont associées au cours de l’année d’imposition donnée en vertu de l’alinéa 256(1)a) de la Loi. ... Toutefois, le revenu imposable et le capital imposable utilisé au Canada du cédant pour son année d’imposition où tombe la disposition seront pris en considération aux fins des alinéas 157(1.3)b) et 157(1.4)b) de la Loi afin de déterminer si la société cessionnaire se qualifie à titre de PSPCC pour l’année d’imposition où tombe la disposition seulement si la société cessionnaire et le cédant sont associées au cours de cette année d’imposition. ...

Possibly, where FMV consideration has otherwise been given and terms are identical to those of an arm's length transaction. ... Based on prior CRA positions in respect of subsection 15(1), in the case of a CRIC providing a guarantee on the debt of a subject corporation for no fee, CRA would generally not view the provision of such a guarantee as the conferral of a benefit if fair market value consideration were otherwise given in exchange for the guarantee and it would be reasonable in the circumstances to conclude that a party dealing at arm's length would provide the guarantee on the same terms. ... CRA Response Where a subsection 212.3(2) deemed dividend has been triggered by a foreign controlled CRIC providing a guarantee for no consideration in respect of a subject corporation's debt and the deemed dividend was reduced by a reduction of PUC under subsection 212.3(7), the mere repayment of the underlying debt (which would relieve the foreign controlled CRIC of its guarantee obligations) would not satisfy the requirements of subsection 212.3(9) in order to reinstate the PUC. ...

Reasons: See below. 2016 International Fiscal Association Conference CRA Roundtable Question 3 – Application of subsections 84(3) & (4) to a functional currency tax reporter Assume that a Canadian corporation (“Issuer”) with 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$1.00 and that this amount is added to the stated capital of the preferred shares. ... Where there is still doubt in a particular situation, including where certain anomalies appear to arise based on these principles, we would invite taxpayers to submit additional questions to us for our consideration. ... From a strict tax perspective, as noted in our introductory comments above, the maintenance of legal stated capital in a foreign currency does not change any of these answers as PUC is fundamentally a C$ tax concept, absent functional currency considerations. ...

Transactions undertaken prior to the Proposed Transactions 21) Prior to the Proposed Transactions, Subco transferred the Unwanted Assets to Holdco at their FMV in consideration for cash, which will all be used immediately after it is received to repay some of Subco's liabilities including a shareholder loan owed to Shareholder 1. 22) Holdco will use the Unwanted Assets to operate its business. 23) Immediately before the Proposed Transactions, Shareholder 1 will personally assume the Long-term Debt in exchange for XXXXXXXXXX Class E preferred shares in Subco having a redemption price equal to the outstanding balance of the Long-term Debt. Proposed Transactions 24) Shareholder 1 and the Trust will transfer all the shares that they hold in Subco to Parentco at FMV in consideration for cash. 25) The Purchase and Sale Agreement governing the sale of the issued and outstanding shares in Subco to Parentco will not include a price adjustment clause. 26) The purchase price to be paid by Parentco will be greater than the lesser of the PUC of the Subco shares and the cost amount of Subco's assets immediately before the Proposed Transactions. 27) Soon afterwards, Parentco will cause Subco to be wound-up. ... Nothing is this letter should be construed as a confirmation, express or implied, that, for the purpose of any of the Rulings listed above, any adjustment to the FMV of the properties transferred or the redemption amount of the shares issued as consideration, whether pursuant to a price adjustment clause or otherwise, will be effective retroactively to the time of the transfer or issuance of shares. ...

X makes the exchange pursuant to the rules of subsection 86(1) of the ITA, as subsection 51(1) of the ITA does not allow for an exchange involving non-share consideration. ... Furthermore, it is important to note that, even if in a given situation subsection 86(1) of the ITA does not apply, depending on the facts and circumstances, another "rollover" provision may apply, such as section 51 or 85 of the ITA (the latter legislative provision allows, among other things, for the disposition of property for consideration that includes both shares of the capital stock of the transferee corporation and non-share consideration). ...

As consideration for the Project, Canco will receive cash and shares of Acquisitionco. ... Holdco1 will receive XXXXXXXXXX Cash Proceeds and XXXXXXXXXX Share Proceeds as consideration for its shares of New Holdco and Holdco2 will receive XXXXXXXXXX Cash Proceeds and XXXXXXXXXX Share Proceeds as consideration for its shares of New Holdco. ...

This list is not exhaustive and, in different circumstances, one factor or another may be more important. 14] While future prospects of the debtor company may be relevant in some cases, the predominant considerations would normally be past and present. ... If future considerations are only speculative, they would not be material in an assessment of whether a past due debt is collectible. ... As also mentioned by the FCA in the Rich case, while the predominant considerations for determining whether a debt is bad would normally be past and present facts, future prospects may be relevant in some cases such as one involving a loan by a shareholder to his or her closely held corporation. ...