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Accordingly, where, under a plan of arrangement pursuant to s. 192(1) of the CBCA all the Canco common shares (other than those shares held by dissenting shareholders) are disposed of to another CBCA corporation ("Holdco") for consideration that consists solely of Holdco common shares, such transactions will not necessarily be disqualified under s. 256(7)(e) by reason only that dissenting shareholders dispose of their Canco common shares to Canco and receive consideration other than shares of Holdco by virtue of exercising their dissent rights. ...

CRA considers that: “[R]evenue” under normal accounting practices generally requires the satisfaction of certain performance obligations, such as the sale of goods or the performance of services that would typically result in a corresponding inflow of cash, accounts receivables or other consideration. CRA applied this test to find that the “revenue reported by the entity under the percentage of completion method would generally be considered ‘qualifying revenue’,” whereas mark-to-market valuation adjustments made by to the carrying value of investments by investment and brokerage firms would not give rise to an “inflow of cash, receivables or other consideration” under the above test, so that such (unrealized) gains or /losses would not affect qualifying revenue. ...

Newco redeems its preferred shares in consideration for the “Newco note”. Opco redeems the shares that Newco received in step 2 in consideration for the issuance to Newco of the “Opco note”. ... Newco redeems the shares that it issued to Opco in step 1 in consideration for the “Newco note”. ...

The annual rate of dividend on such shares (expressed as a percentage of the consideration for which they were issued) of 6% was higher than the prescribed rate of interest at the time of the issuance of the shares in Years 1 and 4 – although the corporation amended its articles after Year 4 and before Year 13 to reduce the dividend rate to 1%, which was the prescribed rate in Year 13 and less than the prescribed rate in Years 1 and 4. ... Would the situation be remediated if the shareholder effected a s. 51 exchange of such Class A shares for Class B shares with the same attributes except for the fixed annual dividend rate (as a percentage of the fair market value of the consideration for which the shares were issued) equalling the prescribed rate at the time of the exchange? ... Thus, depending on the facts, the fixed annual dividend rate, expressed as a percentage of the fair market value of the consideration for the issuance of the Class B shares, would not exceed the prescribed rate of interest on the issuance of the Class B shares. ...

CRA stated (TaxInterpretations translation): the shares in the capital of Newco issued to X and Y are deemed to have been property, immediately before their issuance, of a person who was not related to X and Y unless they were issued in consideration for other shares. Since the shares in the capital of Newco were issued in consideration for shares in the capital of ABC, we are of the view that the [24-month] holding test is satisfied. ...

11 June 2015 External T.I. 2014-0522641E5 F- Usufruct-- summary under Qualified Farm or Fishing Property Summary Under Tax Topics- Income Tax Act- 101-110- Section 110.6- Subsection 110.6(1)- Qualified Farm or Fishing Property termination of usufruct between father and son on farmland, which was a deemed trust, did not entail disposition of qualified farm property A father, who has carried on a farming business for a number of years, grants the bare ownership of the property for consideration to his son while retaining rights as the usufructuary. ... After noting that under s. 248(3)(a) "the property which is transferred to the son is an interest in a deemed trust," and indicating that "as the bare owner did not transfer, assign or dispose of any property to the deemed trust,…paragraph 108(7)(b) cannot apply to deem the beneficial interest of the bare owner to have been acquired for nil consideration," so that the deemed trust was not a personal trust, CRA stated: A right of a usfructuary, which is an interest in a trust…is not a QFP. … At the termination of the usufruct and, thus, of the deemed trust, there is a disposition of property held by the deemed trust in favour of the bare owner. ...

30 May 2013 External T.I. 2013-0487301E5- 3P Project-- summary under Class 14 Summary Under Tax Topics- Income Tax Regulations- Schedules- Schedule II- Class 14 failure to state consideration for concession The query noted that para. 12 of 2006-0218781R3 stated: In return for the grant of the Concession, the Partnership will agree to construct the Facility and operate it during the Operating Period at its own expenses except for the amount of $XX that the Minister will pay to the Partnership during the Construction Period. Would CRA's treatment of a particular concession or licence as a Class 14 asset be the same if the particular concession agreement did not specifically state that the particular entity will agree to incur the costs to construct and operate the facilities during the term of the agreement in consideration for the grant of a concession? ...

30 April 2009 External T.I. 2008-0296721E5 F- Late filed election 85(7)- Amending transactions-- summary under Subsection 85(1) Summary Under Tax Topics- Income Tax Act- Section 85- Subsection 85(1) CRA will not accept s. 85 election based on self-help rectification to retroactively issue shares at transfer time An individual transferred an immovable to his corporation for non-share consideration. ... Consequently, CRA would not be able to accept a late election filed by the taxpayer and the Corporation under subsection 85(7) since, based on the Contract initially entered into by the taxpayer and the Corporation, one of the conditions set out in subsection 85(1) (i.e., the issuance by the Corporation of share consideration) would not have been satisfied. ...

Would the proceeds of disposition of the policy be determined on the basis that no consideration was given for the transferred policy? CRA responded that s. 148(7)(a) applied to deem Holdco: to have become entitled to receive proceeds of disposition equal to $240,000 (the greater of (i) the cash surrender value of the interest ($240,000), (ii) the FMV of any consideration for the interest (N/A), and (iii) the ACB of the interest to Holdco ($200,000).) ...

After stating that “[s]ince a corporation does not own its own shares prior to their issuance, it follows that the issuance of shares by a corporation to a trust for consideration equal to their FMV generally does not constitute a transfer of property to which subsection 75(2) could apply,” CRA went on to state: [T]o the extent that such a scenario does not contravene applicable corporate and trust law and that the Trust subscribed for shares of Opco and Newco for consideration equal to their FMV, it appears to us that the issuance of shares by Opco and Newco would not constitute a transfer of property to which subsection 75(2) would likely apply. ...