Search - consideration

Reasons: In this situation, the exception in clause 18(9)(a)(iii)(B) does not apply since the employer's pre-funding of its required contributions to the Trust cannot be deemed consideration for life insurance in respect of a period that ends more than 13 months after the consideration is paid. ... In general terms, this exception applies where an employer has incurred an expense or made an outlay as consideration for group term life insurance in respect of a period that ends more than 13 months after the consideration is made. ... In this situation, the exception in clause 18(9)(a)(iii)(B) does not apply since the employer's pre-funding of its required contributions to the Trust cannot reasonably be regarded as consideration for life insurance in respect of a period that ends more than 13 months after the consideration is paid. ...

Reasons: The payment fits into the description of an amount under 6(3)(e) as an amount paid as consideration for a covenant with reference to what the employee is not to do after termination of employment, making the payment deemed to be salary, wages or other remuneration under section 5. ... Subsection 6(3) of the Income Tax Act (the "Act") states: An amount received by one person from another (a) during a period while the payee was an officer of, or in the employment of, the payer, or (b) on account, in lieu of payment or in satisfaction of an obligation arising out of an agreement made by the payer with the payee immediately prior to, during or immediately after a period that the payee was an officer of, or in the employment of, the payer, shall be deemed, for the purposes of section 5, to be remuneration for the payee's services rendered as an officer or during the period of employment, unless it is established that, irrespective of when the agreement, if any, under which the amount was received was made or the form or legal effect thereof, it cannot reasonably be regarded as having been received, (c) as consideration or partial consideration for accepting the office or entering into the contract of employment, (d) as remuneration or partial remuneration for services as an officer or under the contract of employment, or (e) in consideration or partial consideration for a covenant with reference to what the officer or employee is, or is not, to do before or after the termination of the employment. In the absence of any evidence to the contrary, it appears that the $XXXXXXXXXX paid for the confidentiality provision fits squarely within the scope of paragraph 6(3)(e) of the Act, as an amount that can reasonably be regarded as being in consideration for a covenant with reference to what the officer or employee, is or is not, to do before or after the termination of the employment. ...

Your client will receive consideration for entering into such agreement. 3. ... You requested our opinion as to whether the consideration received with respect to the non-competition agreement would also be considered U.S. source income for purposes of that subsection. ... We agree with your interpretation of section 42 of the Act with respect to the tax treatment of the consideration to be received with respect to the non-competition agreement. ...

You have queried whether a farmer may utilize a portion of his or her unused capital gains deduction, when transferring the farm land, without requiring the child to pay any consideration or only requiring the child to pay an amount which is less than the adjusted cost base of the land. ... If the property to be transferred is land and the actual proceeds of disposition (i.e. consideration) is any amount between the fair market value of the property and its adjusted cost base, then that amount is deemed to be the parent's proceeds of disposition and the cost of acquisition of that property to the child. While it is acceptable for the transfer to take place for no consideration (a gift), this means that the farmer cannot utilize any unused portion of the captial gains deduction. ...

In brief, a testamentary trust proposes to transfer land that it holds as capital property to a taxable Canadian controlled private corporation for nil consideration. ... You are concerned that subsection 110.6(7) of the Act will deny the beneficiaries such capital gains deductions because no consideration is to be paid for the property in question. ... Even though paragraph 69(1)(b) of the Act deems a taxpayer to have received proceeds of disposition equal to fair market value where the taxpayer disposes of property for no proceeds in a non-arm's length situation, property that was factually acquired for no consideration, that is, consideration significantly less than the fair market value of the property at the time of the transaction, will trigger the consequences of subsection 110.6(7) of the Act under which the capital gains deduction will be denied. ...

Your client will receive consideration for entering into such agreement. 3.      ... You requested our opinion as to whether or not the consideration received with respect to the non-competition agreement would also be considered U.S. source income for purposes of that subsection. ... We agree with your interpretation of section 42 of the act with respect to the tax treatment of the consideration to be received with respect to the non-competition agreement.  ...

You also ash whether a right to receive these shares is necessarily assimilated to a consideration other than shares. ... Furthermore, such an interpretation would again lead to the ludicrous result of having consideration given by the subsidiary transferee corporation in the form of rights to receive shares not being accounted for at all, i.e. in either subparagraph 2XXXX(k)(ii) or (iii), for no apparent reason. To summarize, the fair market value of consideration given by the subsidiary transferee corporation which is either in the form of shares of another corporation or in the form of rights to acquire shares (of any corporation) must be taken into account in subparagraph 2XXXX(k)(iii) of the Act. ...

Principal Issues: whether a standby charge can be computed when there is no apparent consideration, no cost to the employer in acquiring the automobiles. ... Reasons FOR POSITION TAKEN: In an arm's length transaction there is likely to be consideration given in exchange for the use of the automobiles and that consideration becomes the cost of the automobile for the purposes of the calculation under subsection 6(2) of the Act. 942100 J. ... The consideration need not necessarily be in cash. It is not uncommon for the use of automobiles or other goods to be provided in exchange for non-cash consideration such as goods, services or certain rights and privileges. ...

If the Trust has a non-resident beneficiary and receives non-share consideration from a non-arm’s length Canadian resident corporation (“Holdco”), such non-resident beneficiary would be deemed to receive a certain proportion of any non-share consideration received by the Trust on the disposition of the Canco low paid-up capital shares. To the extent that the conditions of subsection 212.1(1) are met, this would result in a dividend deemed to be paid to the non-resident beneficiary, subject to Canadian withholding tax, notwithstanding the fact that the non-share consideration does not exceed the ACB of the Canco shares. In this scenario, where section 84.1 would not apply because the Trust has full ACB in the Canco shares, would the CRA seek to apply section 212.1 based on a technical application of the look-through rules, even though the non-share consideration received by the Trust does not exceed the ACB of the shares that are disposed? ...

The grantor receives no consideration for granting the option. At the expiration of four years of the option period, when the property has a fair market value of $13,000, the option period is extended for another five years without any consideration being received by the grantor. ... In the first set of questions, you have asked as to assume that the grantee acquires the property for actual consideration equal to its fair market value of $18,000. 1. ... In the following set of questions, you have assumed that the grantee acquires the property for consideration equal to the stipulated option price of $10,000. 4. ...