Search - consideration

Principal Issues: whether JEC grandfatheing rules apply where 1)amount of consideration not specified or 2)if open-ended agreement extended Position: no, no Reasons: 1)payment is not made under agreement in writing unless payment must be made 2) extention of agreement would create new agreement for the additional period 970517 XXXXXXXXXX Denise Dalphy (613) 957-9231 Attention: XXXXXXXXXX March 4, 1997 Dear Sirs: Re: Joint Exploration Corporation Transitional Rules This is in reply to your letter of February 14, 1997, wherein you requested our opinion on the proposed transitional rules (the "transitional rules") for "joint exploration corporations" which are described in subsection 13(36) of the Notice of Ways and Means Motion tabled on December 6, 1996. In our view, the "agreement in writing" referred to in the transitional rules refers to an agreement in respect of which there has been a meeting of minds on, inter alia, consideration. ...

As indicated in paragraph 3 of Interpretation Bulletin IT-110R3, Gifts and Official Donation Receipts (copy enclosed), a gift is a voluntary transfer of property without valuable consideration. ... The first condition is not met as the purported donation is made to retailers of kosher-approved food products and these retailers are not registered as charities; the second condition is not met as the purported cash donation is part of the cost of the food products and is not made voluntarily; and the third condition is not met as the purported donation is not without consideration since food products are received in exchange for their donation. ...

Reasons: The transfer is not voluntary and consideration is received for the gift (albeit not from the charity) 972933 XXXXXXXXXX J.E. ... A gift for purposes of section 110.1 of the Income Tax Act is a voluntary transfer of property without valuable consideration. ...

The Vendor sells the shares to a Canadian corporation (the "Purchaser") and receives Special Warrants issued by the Purchaser as consideration. The terms of the Special Warrants provide that: 1.On exercise thereof, the Vendor will be entitled to receive 1 common share of the Purchaser without payment of any additional consideration. 2. ...

Position TAKEN: No provided that all shareholders have the right to participate pari passu in the payment of dividends beyond (1) their dividend entitlements, in the case of preferred shareholders, and (2) a reasonably similar or like amount to common shareholders after taking the different class features into consideration. ... In our view the existence of multiple classes of preferred shares would not be contrary to paragraph 130.1(6)(e) provided that all shareholders have the right to participate pari passu in the payment of dividends beyond (1) their dividend entitlements, in the case of preferred shareholders, and (2) a reasonably similar or like amount to common shareholders after taking the different class features and characteristics into consideration. ...

Subsection 206(4) of the Income Tax Act (the “Act”) provides that where an RRSP, RRIF or other taxpayer, as noted therein, acquires a property from a person with whom the taxpayer was not dealing at arm’s length, for no consideration or for consideration that is less than the fair market value of the property at the time, the taxpayer will be deemed to have acquired the property at its fair market value. ...

Reasons: Comments reflected a suggestion for greater certainty only; upon further consideration concluded that taxpayer would not be able to rely on subsection 66(12.61). 983306 XXXXXXXXXX A.A. ... Our Comments XXXXXXXXXX However, after further consideration of this matter, we share your view that a taxpayer would not be able to rely on the provisions of subsection 66(12.61) of the Act to establish that an expense had been incurred for purposes of the definition of “qualifying mining exploration expense” contained in the METC legislation. ...

Paragraph 3 of Interpretation Bulletin IT-110R2, copy enclosed, states that a gift for income tax purposes, is a voluntary transfer of property without valuable consideration. ... No valuable consideration- no benefit of any kind- to the donor or to anyone designated by the donor may result from the payment. ...

Principales Questions: Are TV Program Listings taken into consideration when determining the contents of an issue of a periodical for purposes of subparagraph (b)(vi) of the definition of "Canadian issue" in subsection 19(5) of the Act? ... Generally, where a periodical contains a significant amount of articles with a TV program listings which provides a brief description of the program as well as the title, the channel and the time on which the program is aired, it is our opinion that the TV program listings are not taken into consideration in determining the contents of a periodical for the purposes of subparagraph (b)(vi) of the definition of "Canadian issue" in subsection 19(5) of the Act. ...

In other words, the amount or value of the benefit conferred where corporate owned property is made available to a shareholder would generally be considered to be equal to the fair market rental of that property less any consideration paid by that shareholder with regard to the property. As noted in that response, however, where this approach is not appropriate for measuring the value of the benefit, i.e., if it does not provide a reasonable return on the cost or value of the property, the benefit would generally be determined with reference to a normal rate of return on the greater of the cost or fair market value of the property, plus any related operating costs but reduced by any consideration paid by that shareholder with regard to the property. ...