Search - consideration

Paragraph 74.4(3)(a) provides as follows: (a) in the case of a transfer of property to a corporation, the amount, if any, by which the fair market value of the property at the time of the transfer exceeds the total of (i) the fair market value, at the time of the transfer, of the consideration (other than consideration that is excluded consideration at the particular time) received by the transferor for the property, and (ii) the fair market value, at the time of receipt, of any consideration (other than consideration that is excluded consideration at the particular time) received by the transferor at or before the particular time from the corporation or from a person with whom the transferor deals at arm’s length, in exchange for excluded consideration previously received by the transferor as consideration for the property or for excluded consideration substituted for such consideration; Subparagraph 74.4(3)(a)(i) takes into account consideration received on the initial transfer and, therefore, would not apply to an exchange of shares under a subsequent refreeze. Subparagraph 74.4(3)(a)(ii) would also not apply as the shares received on the refreeze constitute “excluded consideration”, as that term is defined in subsection 74.4(1). ... Subparagraph 74.4(3)(a)(ii) will reduce the outstanding amount by the fair market value, at the time of receipt, of consideration from the corporation in exchange for excluded consideration previously received by the transferor as consideration for the property or for excluded consideration substituted for such consideration. ...

Our understanding of the major components of the arrangements under consideration is as follows: 1. ... Where consideration is given for a share purchase warrant that constitutes a FTS, we have generally accepted that renunciations may be made by a PBC to the person who gave the consideration for, and acquired, the warrant up to the amount of such consideration. ... Therefore, where the terms of the warrant require additional consideration to be paid upon the exercise thereof to acquire actual shares of the PBC, it is also our position that renunciations in respect of qualifying expenses may potentially be made by a PBC up to the amount of such consideration (with the "24 month" period, in which the PBC is to incur the qualifying expenses in relation to the consideration given for the shares, generally not viewed as commencing until the warrant is exercised). ...

In the CCRA's view, the entire amount of the mortgage assumed is assumed as consideration for the transferred property. ... The consideration given upon the redemption is the assumption of the $700 mortgage. In the CCRA's view, the entire amount of the mortgage assumed is assumed as consideration for the transferred property. ...

Restrictive Covenants In very general terms, the rules concerning restrictive covenants are divided into two categories, the first being where there is no consideration for the restrictive covenant, and the second being where there is consideration. The rules applicable to situations where there is no consideration are generally more widely applicable. ... Accordingly, it would be common in drafting a restrictive covenant to state that the consideration is the sum of $1 and other valuable consideration etc. ...

Where the purchaser assumes contingent liabilities, e.g., warranty reserves, as consideration for assets (i.e., the amount of other consideration is less than what would otherwise have been received by the vendors had the contingent liabilities not been assumed by the purchaser), we believe that the following results arise:? ... In a situation where the contingent liabilities are assumed as part of an ongoing business, e.g., unidentified future severance payments, and not as consideration for any of the assets (i.e., the amount of other consideration received by the vendor is not affected by the assumption), we believe the following results arise:? ... Our response to this question was that the issue was under consideration. ...

The excess of the non-share consideration over the fair market value of a transferred property in such a situation should be considered to be non-share consideration of another property. ... However, if the consideration for all properties transferred is taken into account, no benefit may be considered to have been conferred. ... The consideration received is a note for $20,000 and shares. Section 85 envisages a property by property transfer. ...

The excess of the non-share consideration over the fair market value of a transferred property in such a situation should be considered to be non-share consideration of another property. ... However, if the consideration for all properties transferred is taken into account, no benefit may be considered to have been conferred. ... The consideration received is a note for $20,000 and shares. Section 85 envisages a property by property transfer. ...

22 February 1985 Income Tax Severed Letter RCT 85-029 F Unedited CRA Tags 85.1 RE:     85.1 and IT-450 In the course of a share for share exchange pursuant to section 85.1 when the vendor receives shares for some of the exchanged shares and cash or other consideration for other exchanged shares, paragraph 5 of IT-450 indicates that 85.1(1) may be used in respect of the exchanged shares for which shares were received, provided the vendor can clearly identify which shares were exchanged for cash or other consideration and which were exchanged for shares. Recently, the purchaser corporation in these situations has frequently been offering a combination of share and non-share consideration for each share of the target corporation. In advance rulings, provided the takeover offer clearly indicates that the share consideration will be exchanged for a specified fraction of each share tendered and that the non-share consideration will be given for the remaining specified fraction of each such share, we have ruled that 85.1(1) will apply to the exchange of the specified fraction of each share that is exchanged for share consideration. ...

Moreover, the identical phrase in subparagraph 74.4(3)(a)(ii) refers to the time the individual actually receives consideration from the corporation or an arm's length person, other than excluded consideration, that is received in exchange for excluded consideration previously received by the individual for the transferred property (or excluded consideration substituted for such excluded consideration). ... A for the property, being $Nil and (ii) the FMV, at the time of receipt, of any consideration (other than excluded consideration at the time of receipt) received by Mr. A from Aco in exchange for excluded consideration previously received by Mr. ...

A promise is enforceable if it is made for consideration. Since a donor cannot receive consideration for a gift, it is not possible for a person to make a gift by issuing a gift certificate directly to a charity. ... In order for a promise to be enforceable, there must be consideration. ... If the charity should transfer the gift certificate to a third person for consideration, the issuer of the gift certificate may, at that point, become "estopped" from refusing to honor the gift certificate for lack of consideration. ...