Search - consideration

A personal trust is defined in subsection 248(1) of the Act and includes an inter vivos trust in which no beneficial interest was acquired for consideration. ... Paragraph 69(1)(a) of the Act deems property acquired from a non-arm’s length person for consideration in excess of fair market value to be acquired at fair market value, and paragraph 69(1)(b) of the Act deems property disposed of to a non-arm’s length person for proceeds less than fair market value to be disposed of at fair market value. In addition, where an RRSP trust disposes of property for a consideration less than fair market value of the property or acquires property for a consideration greater than the fair market value, the difference between the fair market value and the consideration is income of the annuitant in the year pursuant to subsection 146(9) of the Act. ...

A personal trust is defined in subsection 248(1) of the Act and includes an inter vivos trust in which no beneficial interest was acquired for consideration. ... Paragraph 69(1)(a) of the Act deems property acquired from a non-arm’s length person for consideration in excess of fair market value to be acquired at fair market value, and paragraph 69(1)(b) of the Act deems property disposed of to a non-arm’s length person for proceeds less than fair market value to be disposed of at fair market value. In addition, where an RRSP trust disposes of property for a consideration less than fair market value of the property or acquires property for a consideration greater than the fair market value, the difference between the fair market value and the consideration is income of the annuitant in the year pursuant to subsection 146(9) of the Act. ...

The exception referred to in your letter is stated in the Act as follows: "at the time of the transfer the fair market value of the transferred property did not exceed the fair market value of the property received by the transferor as consideration for the transferred property;" Therefore, in order to qualify for this exception, "at the time of the transfer" fair market value consideration must be received from the transferee. Receipt of fair market value consideration at a date subsequent to the transfer date will not cease attribution unless as stated above, the original property, or property substituted is returned to the transferor. If the transferor takes back a debt as consideration (ie. sale of an asset for a promissory note) then interest (equal to the lesser of a Revenue Canada prescribed rate or an arm's length rate) must be charged and paid within thirty days of the end of each year the debt is outstanding or attribution will occur. ...

A personal trust is defined in subsection 248(1) as including an inter vivos trust in which no beneficial interest was acquired for consideration payable to the trust or to a person who has made a contribution to the trust. ... Paragraph 69(1)(a) deems property acquired from a non-arm's length person for consideration in excess of fair market value to be acquired at fair market value, and paragraph 69(1)(b) deems property disposed of to a non-arm's length person for proceeds less than fair market value to be disposed of at fair market value. In addition, where an RRSP trust disposes of property for a consideration less than fair market value of the property or acquires property for a consideration greater than the fair market value, the difference between the fair market value and the consideration is income of the annuitant in the year pursuant to subsection 146(9). ...

Principal Issues: If the transferor receives a promissory note as consideration for property transferred (shares) to his spouse or spouse trust, is the adjusted cost base of the note equal to the value equal to the face amount of the note? ... Further, subsection 73(1) of the Act does not preclude a taxpayer from receiving a note or similar debt instrument as consideration for transferred property. ... Furthermore, the spouse or the spouse trust would be deemed to have acquired the shares at that time for an amount equal to such proceeds of disposition whether or not the transferor received a cash payment, a promissory note, or no consideration. ...

Position: no effect on benefit calculation re: the second class Reasons: 74.4(2)(f) specifically refers to taxable dividends paid on the shares that were issued as consideration for the transferred property so dividends paid on other shares would not be included in the calculation of a benefit in respect of the shares issued as consideration XXXXXXXXXX 5-983094 D. ... X transfers, at fair market value, a rental property to Holdco, elects under subsection 85(1) in respect of the transfer and receives a second class of special shares as consideration. ... It is our view that, as paragraph 74.4(2)(f) specifically refers to taxable dividends received on the shares that were received as consideration for the transfer of property, that is, the second class of special shares, the fact that dividends were paid on the first class of special shares does not affect the calculation of the deemed interest benefit on the second class of special shares. ...

In your letter, you refer to Interpretation Bulletin IT 239-R2 which states that, if a guarantee has been given for adequate consideration, it will generally have been considered to have been given for the purposes of gaining or producing income. ... You further comment that, in your view, the Bulletin seems to suggest that where a guarantee of a loan has been given for adequate consideration and the guarantor has been called upon to honour the guarantee so given, the loss that is sustained on the debt is necessarily a capital loss. ... The foregoing comments are not meant to suggest that a capital loss will result in every situation where a guarantor has received adequate consideration for granting a guarantee. ...

In circumstances where a couple jointly purchases property which they register in both their names but the purchase funds including principal and interest payments on any loan obligation are provided solely from the assets or earnings of only one of the spouses (the "Contributing Spouse") it is our view that the attribution rules would apply to property transferred by the Contributing Spouse to the other spouse as consideration for the other spouse's share of the jointly held property. ... In particular, you describe a situation where a taxpayer transfers for valuable consideration, using legally effective steps, including having the title for the property changed, his or her share of the principal residence to the taxpayer's spouse (the "Spouse"). ... Except where fair market value consideration is paid by the spouse or the parties are living separate and apart by reason of a breakdown of their marriage, income earned and capital gains and losses realized on property transferred or loaned from a taxpayer to the taxpayer's spouse (and on property substituted for that property) are generally deemed to be the income, gains or losses of the taxpayer and not of the taxpayer's spouse (the "Attribution Rules"). ...

/ Est-ce que les avantages imposables doivent être pris en considération aux fins du test d'au moins 14 jours consécutifs sans rémunération dans la définition d'un employé admissible et si oui, comment déterminer la période visée par un tel avantage? ... 3- Is there a difference between the remuneration that has to be taken in consideration for the 14 day remuneration condition for an individual to qualify as an “eligible employee” and the “eligible remuneration” paid to an employee to calculate the CEWS? ... Position: 1- Yes / Oui 2- No / Non 3- Yes / Oui Reasons: 1- Taxable benefits are remuneration and therefore, an employer must take these benefits into consideration for purposes of determining whether the 14 day remuneration condition is met. ...

Kuss Attention: XXXXXXXXXX October 25, 1994 Dear Sirs: Re: Subsection 85.1(4)- Technical Interpretation This is in reply to your letter dated May 26, 1994 regarding the application of subsection 85.1(4) to the following hypothetical situation. 1.Canco, a taxable Canadian corporation, owns 100% of USco, a foreign affiliate of Canco. 2.Prior to taking USco public, Canco transfers its shares in USco to a U.S. holding company (Holdco") for fair market value consideration consisting of Class A common shares of Holdco. Holdco is a foreign affiliate of Canco. 3.USco carries on an active business and all of its assets are "excluded property" as defined in subsection 95(1). 4.Holdco issues additional Class A common shares from treasury to the public for fair market value consideration. 5.Canco subsequently sells some of its shares of Holdco to the public. ...