Search - consideration

In a situation wherein an oil and gas exploration corporation has entered into an agreement with its arm's length employees whereby the corporation agrees to issue its "flow-through" shares to these employees for a specified consideration, upon such issuance, employment benefits will be recognized by each of these employees pursuant to paragraph 7(1)(a) of the Act. ... Furthermore, subsection 66.3(3) of the Act would also apply to deem these shares to have been acquired by these employees at a cost to them of nil, notwithstanding that they would have paid the specified consideration for the shares. ...

Principal Issues: Whether subsection 76(1) is applicable to consider that payment of a demand note has been made when one non-resident sells that note to a second non-resident and receives a second demand note as consideration. ... The note receivable is in respect of a business carried on in Canada by the third non-resident and the consideration given by the second non-resident consists of a second demand note having a principal amount equal to the total of the principal amount of the original note plus the interest accrued thereon. ...

In our opinion, where an insurance company accepts an annuity contract as partial consideration for the assumption of another party's obligation with respect to an out of court settlement, the insurance company would be required to include in income, in the year the annuity contract is received, an amount equal to the aggregate of the fair market value of the annuity contract and the other consideration pursuant to section 9 of the Income Tax Act (the "Act").  ...

" However, paragraph 110.6(14)(f) provides the following::      "shares issued after June 13, 1988 by a corporation to a particular person... shall be deemed to have been owned immediately before the issue by a person who was not related to the particular person...unless the shares were issued      (i)  as consideration for other shares, or      (ii)  as part of...a series of transactions in which the person...disposed of property to the corporation that consisted of all or substantially all of the assets used in an active business carried on by that person... ... This is so because criteria (ii) is clearly not met an criteria (i) may not be met since the shares received were issued as a split of the existing share and not as consideration for other shares. 24(1) IT-65, "Stock splits and Consolidations" provides the following:      "Where all the shares of a class of stock of a corporation are replaced by a greater or lesser number of shares of the same class of stock of the same corporation in the same proportion for all shareholders, in circumstances where there is no change in the total capital represented by the issue, there is no change in the interests, rights or privileges of the shareholders and there are concurrent changes in the capital structure of the corporation or the rights and privileges of other shareholders, no disposition or acquisition is considered to have occurred". ...

While we agree with the comments in the draft bulletin, we have noted the following points for your consideration: 1.      ... Furthermore, designations under subsections 104(13.1) and 104(13.2) of the Act will result in a reduction in the adjusted cost base to the beneficiaries of their capital interest in the trust under paragraph 53(2)(h) of the Act, unless that interest was acquired for no consideration where the trust is a personal trust. ...

A") of the capital stock of a corporation ("Opco") transfers the particular shares to Opco for consideration that includes shares of Opco and that, even though all of the shares of a particular class were so transferred, the provisions of subsection 86(1) of the Act would not apply by virtue of the limitation provided in subsection 86(3) of the Act. Assumptions In formulating our reply we have made the following assumptions. i)     Opco is a taxable Canadian corporation within the meaning of subsection 89(1)(i) of the Act. ii)     All the issued shares of the particular class of Opco shares are transferred. iii)     The share attributes of the particular shares of Opco received as consideration for the particular shares of Opco transferred are not identical. iv)     The amount by which the paid-up capital in respect of the class of shares issued by Opco has increased by virtue of the issuance of the shares on the transfer, is equal to the paid-up capital of the shares being transferred to Opco by Mr. ...

Consequently, while CPP contributions that are required to be paid during the leave period are to be deducted and remitted by the trustee as by any other employer, those CPP contributions paid in the year prior to the leave period must be taken into consideration by the trustee. ... However, since CPP contributions made during the year prior to the leave period are to be taken into consideration by the trustee, the amount of contributory earnings reported by the trustee may not coincide with the amount of contributions reported in box "D".  ...

Ahmed   (613) 957-2092 August 28, 1989 Dear Sirs: Re:  Subsections 85(1) and 86(1) of the Income Tax Act (the "Act") This is in response to your request for a technical interpretation contained in your letter of January 26, 1989, wherein you requested our views as to whether the provisions of subsection 85(i) of the Act would apply where a taxpayer disposes of shares of a taxable Canadian corporation to that corporation for consideration which includes shares of the capital stock of the corporation and the taxpayer and the corporation jointly elect in prescribed form to have the provisions of subsection 85(1) of the Act apply thereto. ... Opinions In our view, the provisions of subsection 85(1) of the Act apply in the case where a taxpayer transfers shares of a taxable Canadian corporation to that corporation and receives newly issued shares of the corporation as consideration therefore provided that the transferor and transferee file the prescribed form within the time limits specified in subsection 85(6).  ...

You are of the view that the consideration of such amounts would be consistent with the approach taken by the Federal Court of Appeal in Youngman vs. ... In the case of artwork, antiques or any other luxury property it may be very difficult to find a fair market rental value which could be used in the determination of the shareholder benefit and, as stated in our response to question 33 at the 1987 Revenue Canada Roundtable, the benefit may have to be determined using a normal rate of return on the greater of the cost or fair market value of the property, plus the related operating costs, less any consideration paid to the corporation by the shareholder.  ...

You ask what is meant by the phrase "an interest in a trust that was not acquired for consideration" and ask for further clarification of the rules relating to the property that is held in such a trust. A beneficiary's interest in a trust that is not acquired for consideration is an interest which the beneficiary acquired without payment or other transfer, assignment or disposition of property to any person in order to obtain such an interest. ... However, if a trust is established by contributions from two or more unrelated persons and those unrelated persons are beneficiaries of the trust, their respective interests in the trust would be considered to have been acquired for consideration. ...