Search - consideration

The question that has been presented to you is as follows: Where a Canadian corporation grants stock options to individual consultants, who are not employees, such as in consideration for consulting services, what are the corporation's tax withholding and reporting requirements? ... Options Granted for Services Previously Rendered Where options are issued to a consultant as consideration for services rendered as an independent contractor immediately before the options were granted, section 9 of the Income Tax Act (the "Act") will apply to include in the income of the consultant the fair market value of the option at the time of the grant. ... Options Granted for Services to be Rendered In circumstances where it can be determined (i.e. on examination of all the facts and circumstances, including contracts, etc.) that the options are granted in consideration for services that are to be rendered by a self-employed consultant over a period of time after the time of grant, we may, depending on the facts, take the view that the difference between the fair market value of the shares and the exercise price at the time of exercise, or a portion thereof, is consideration received for the services rendered. ...

Furthermore, the agreement clearly provides that the trust has the right to sell the mortgage receivables for consideration. The fact that the trust has agreed to give the bank the first right to purchase mortgage receivables that the trust wishes to sell, does not alter the fact that the trust has the right to realize fair market value consideration on the sale of the mortgage receivables. ... The agreement also requires that the trust is to pay the bank a guarantee fee in consideration for the bank agreeing to repurchase the Sold Mortgages in the circumstances described in the Agreement. ...

It is our view that the following considerations, which are referred to in your memorandum, would not appear to be relevant to the determination of whether the Main Purpose Test has been met:     (a)      the use of section 85 by the shareholder;     (b)       the fact that the shareholder has achieved significant benefits from other tax planning in the years under review; and     (c)       the fact that the shareholder is willing to take additional steps to ensure that his spouse does not benefit from the growth in the investment corporation. 4.     The following considerations may be relevant to the determination of whether the Main Purpose Test has been met:      (a)      value of the consideration received by the shareholder on the transfer to the investment corporation;      (b)  the rights to future income or future growth in respect of the transferred property or property substituted therefor (i.e. whether future income or future growth can reasonably be expected to accrue to someone else as a result of the transfer); and      (c)      amount of the potential benefit to the spouse of the taxpayer (which assists in the determination of whether it is one of the "main" purposes, or an "incidental" purpose). Paragraph 85(1)(e.2) In determining whether the fair market value of the preferred shares of the investment company that were received by the taxpayer as consideration is equal to the fair market value of the shares of the operating company transferred to the investment company, the department normally considers retractable shares with a redemption amount equal to the fair market value of the transferred property to have full fair market value where there can be no erosion of this value (by payment of dividends on other classes of shares, for instance). ...

Subsection 247(12) deems a Canadian resident to have paid a deemed dividend where there is an income adjustment under 247(2) resulting from a purchase for consideration that exceeds the amount that would meet the arm’s length principle or from a sale for consideration that is lower than such amount. ... The economic position of the Canadian resident and the non-resident is substantively identical whether the Canadian resident sells for insufficient consideration or buys for excessive consideration. ... Where the non-resident purchases for consideration that is lower than the amount that meets the arm’s length principle, the deemed dividend takes the form of the excess of such amount over the consideration that it paid for the property or in other words, of the excess of the value of the property acquired over the consideration paid for it. ...

Therefore, GST/HST is not exigible on the payments in consideration for the right. ... X in consideration for the granting of a right or licence to extract aggregates from his property represent income from property. ... Pursuant to subsection 162(2) of the ETA, the supply of the right is deemed not to be a supply and the consideration paid in respect of that right is deemed not to be consideration for the right. ...

A company can issue its own shares as "consideration for the acquisition of property", as Lord Greene M.R. said. ... When the directors of a CBCA corporation determine the consideration for the issue of the shares as consideration for property, it is no different from directors of a corporation deciding to issue a certain number of par value shares as consideration for property. ... Rather than consideration being referable to the product of the par value of the share times the number of shares issued, the consideration is referable to the stated capital of the shares being issued as determined by the directors. ...

A company can issue its own shares as "consideration for the acquisition of property", as Lord Greene M.R. said. ... When the directors of a CBCA corporation determine the consideration for the issue of the shares as consideration for property, it is no different from directors of a corporation deciding to issue a certain number of par value shares as consideration for property. ... Rather than consideration being referable to the product of the par value of the share times the number of shares issued, the consideration is referable to the stated capital of the shares being issued as determined by the directors. ...

The CRA takes the view that barter transactions fall within sections 3 and 9 of the Income Tax Act for the purposes of determining whether an amount has been paid as consideration for goods or services. ... GST/HST Implications In those transactions where a taxable supply of a good or service is made and the consideration for that supply is Bitcoins, the consideration for the supply is deemed to be equal to the fair market value of the Bitcoins at the time the supply is made for the purposes of determining the GST/HST payable for the supply. ...

A literal or legalistic interpretation must be avoided when the basic object of the treaty might be defeated or frustrated insofar as the particular item under consideration is concerned. ... This issue was taken into consideration during the preparation of the bulletin. ... Since disability benefits paid under the SSA up to the age of 65 were not considered a "superannuation or pension benefit", the issue of whether paragraph 6(1)((f) of the Act could apply to such benefits was also taken into consideration. ...

OUR COMMENTS There is no doubt that by negotiating the DCGT, the farmer has a constructive receipt in the current year equal to the consideration received on passing the DCGT on to the supplier. ... Provided the farmer otherwise qualified for the deferral contained in subsection 76(4) of the Act, the mere negotiation of the DCGT for other consideration would not be valid cause to deny the deferral. 2. ... While certain auctioneers may as a practical consideration defer payment to the vendor until such time as the purchaser's cheque has cleared, this does not change the position that the funds belong to the vendor as of the time the auctioneer has declared the livestock to be sold. ...