Search - consideration

The Queen, 86 DTC 6264, [1986] 1 CTC 507 (FCTD), aff'd 88 DTC 6522, [1988] 2 CTC 365 (FCA)-- summary under Paragraph 251(1)(c) Summary Under Tax Topics- Income Tax Act- Section 251- Subsection 251(1)- Paragraph 251(1)(c) JV company at arm's length with 50% shareholder Since the taxpayer was held to be dealing at arm's length with a corporation ("Clarebeau") 1/2 of whose shares were owned by the taxpayer's family holding company and 1/2 of whose shares were owned by the family holding company of his business associate ("Claridge"), a sale by the taxpayer of share purchase options to Clarebeau for nominal consideration was governed by s. 7(1)(b) rather than s. 7(1)(c). ...

The Queen, 89 DTC 5458, [1989] 2 CTC 284 (FCTD)-- summary under Section 67 Summary Under Tax Topics- Income Tax Act- Section 67 bonus amounts to family members were completely disproportionate to services rendered Accrued remuneration incurred by a family-owned corporation for two weeks per year of work at the store by the wife of one of the minority shareholders (of $50,000 per annum for the 1982 to 1984 taxation years of the corporation) and for one month's work each year by each of her four children (ranging from $12,500 to $20,000 for those taxation years) was found to be "completely out of proportion to what others receive for working in the store", and the deductible amount was reduced, taking into account the countervailing consideration that "it is not reasonable to limit their remuneration to what was paid to non-family members". ...

The underground operation was found to be a separate mine from the surface operation in light of such factors as the lack of physical interconnection between the two works, the different anticipated life span for the operations, the lack of interchangeability of the workforces, and the fundamentally different production techniques and safety considerations involved. ...

Repairs or Running Expense perimeter road construction for promotion A large lump sum payment was made by the taxpayer to the City of Calgary in consideration of (i) the City improving the system of roads around the taxpayer's shopping centre and (ii) an implied promise of the City not to assess the taxpayer for local improvement taxes in respect of the cost of such improvements. ...

The consideration paid by Ontra-Desar was stated to include the discharge by it of the second mortgage liability of Clearstream to the taxpayer including the arrears interest. ...

The taxpayer acknowledged these deficiencies (as well as to there being no change to the issued share capital of the corporation) but argued that consideration should have been taken of the errors and failures of his advisor. ...

After rejecting the taxpayers’ submission that they should not be required to comply because it was unclear whether the RFIs were directed to them individually or to their related entities, Pamel J went on to reject a submission that the RFIs contravened s. 13 of the Charter, stating (at para. 76): The ITA’s legitimate purpose in allowing the CRA to audit taxpayers—to ensure compliance with our taxation system—must thus be balanced against the section 7 rights invoked by the Friedmans, with the consideration that the sole object of section 7 is to offer protection in “extraordinary or exceptional circumstances” when the impugned legislation is unjust. ...

Before granting the compliance order, Pentney J cited (at para. 19) Cameco for the proposition that “the fact that the requests may involve substantial documentation which the taxpayer may view as not proportional to the matter is not a relevant consideration,” and further stated (at para. 29): [T]here is no evidence to suggest that the CRA audit has been launched for any purpose other than to ensure compliance with the ETA, or that the request for information was so wide, extraordinary, or unusual as to give rise to questions about its legitimacy in the context of the audit (assuming that such a claim could be brought, in the face of the wide authority granted to the Minister to set the timing, scope, and nature of the audit …). ...

., 76 DTC 6010, [1976] CTC 24 (FCTD)-- summary under Sham Summary Under Tax Topics- General Concepts- Sham no sham if documents describe intended legal rights The taxpayer, wished to sell land to the City of Calgary in consideration for two annual instalments in order to defer a portion of the gain to its second taxation year, but was informed that the City was precluded by statute from purchasing land over a period of years. ...

., 76 DTC 6010, [1976] CTC 24 (FCTD)-- summary under Tax Avoidance Summary Under Tax Topics- General Concepts- Tax Avoidance no sham if documents describe intended legal rights The taxpayer, wished to sell land to the City of Calgary in consideration for two annual instalments in order to defer a portion of the gain to its second taxation year, but was informed that the City was precluded by statute from purchasing land over a period of years. ...