Search - consideration

5 October 2018 APFF Financial Strategies and Instruments Roundtable Q. 1, 2018-0761521C6 F- Life insurance policy as share redempt. proceeds Unedited CRA Tags 148(7), 55(2) Principales Questions: Whether a shareholder receiving an interest in a life insurance policy from a corporation as redemption proceeds for preferred shares the shareholder previously owned in the corporation should be considered as having given consideration for the interest in the life insurance policy? ... Raisons: Based on the meaning of the word "consideration", we are of the view that the shareholder is giving consideration for purposes of clause 148(7)(a)(ii)(B) when its shares are being redeemed. ...

X therefore transfers the shares internally pursuant to subsection 85(1) I.T.A. by selecting $500,000 as the agreed amount and receives in consideration preferred shares with an ACB and FMV of $499,999 and one common share with an ACB and FMV of $1. ... X although the trust acquired the said share for consideration equal to its FMV? ... We therefore feel that subsection 75(2) I.T.A. applies when property is held by a trust under one or more of the conditions provided for in paragraphs 75(2)(a) or (b) I.T.A., notwithstanding the fact that this property was acquired by the trust for consideration equal to its FMV. ...

The steps of the reorganization would be as follows: Parentco transfers shares of Subco1 having an ACB of $200 ($2,000 x $20,000/$200,000) and a FMV of $20,000 to Newco on a rollover basis in consideration for shares of Newco. Subco1 transfers shares of Subco2 to Newco on a rollover basis in consideration for shares of Newco. ... CRA Response We recently received a ruling request with respect to a similar reorganization and we were unable to issue a favourable ruling in that regard based on the following considerations: Let’s consider the following distinct possibilities if there was no reorganization: If Subco1 sold all of its assets at FMV, a total capital gain of $198,000 would be realized by Subco1. ...

CALU Roundtable – May 2022 Question 11 – Application of Section 160 to Segregated Fund Policies Background Where a tax debtor has transferred property to a non-arm’s length person (such as a spouse, child, sibling or parent) for low or no consideration, section 160 of the Income Tax Act (the “Act”) provides that the transferee becomes jointly and severally liable for the tax debtor’s tax debt for an amount up to the fair market value of the property transferred less any consideration paid by the transferee on the transfer. ... Due to the complex nature of these products, the application of section 160 of the Act is decided with consideration to the specific contracts and legislation that applies to each case. ...

b) Can the CRA specify if the mechanism of the "specified future tax consequence" must take into consideration the loss carry-backs made to taxation years before 2006? c) Other than a loss carry-back, can the CRA indicate which elements must be taken into consideration as a "specified future tax consequence"? ... It is rather taken into consideration in element B of this definition. ...

Pursuant to paragraph (j) of that definition, an excluded right or interest includes an interest in a personal trust resident in Canada that was never acquired for consideration and did not arise as a result of a transfer of property to the trust by that individual that would be a qualifying disposition (if subsection 107.4(1) were read without paragraphs (h) and (i)). Note that subsection 108(7) of the Act provides, inter alia, that for purposes of the definitions of "excluded right or interest" and "personal trust" (as defined in subsection 248(1)), a person, or two or more related persons, can contribute to the trust and hold an interest in the trust, without failing the acquisition for consideration prohibition in those provisions. ...

Le temps de travail accompli et l'expertise d'un associé par rapport à ceux des autres associés sont les facteurs à prendre en considération aux fins du paragraphe 103(1.1). ... Selon le paragraphe 3 du bulletin d'interprétation IT-231R2- Sociétés – Associés ayant un lien de dépendance, pour déterminer la valeur proportionnelle du travail accompli par un associé dans les activités de la société, l'ARC prend à la fois en considération le temps consacré au travail et l'expertise apportée. ...

5 October 2012 Roundtable, 2012-0453161C6 F- RRIF, prohibited investment, minimum amount CRA Tags 207.05(4) 146.3(1) Principal Issues: Whether the "transitional prohibited investment benefit" amount that is withdrawn from a registered retirement income fund (RRIF) can be taken into consideration for the carrier obligation to pay the minimum amount? ... L’ARC est d’avis qu’un montant retiré d’un FERR afin de bénéficier de la règle transitoire énoncée au paragraphe 207.05(4) L.I.R. est un montant que l’émetteur a versé au rentier et qui peut être pris en considération pour satisfaire l’exigence du minimum à être versé du FRR au sens du paragraphe 146.3(1). ...

However, in our view for paragraph 95(2)(i) to apply notwithstanding such delay, the taxpayer should be prepared to establish that the brief delay could not practically have been avoided and was not attributable to financial considerations like a desire to earn a return from a non-qualifying investment, to avoid temporary cash flow issues or because of exchange rate considerations. b. ...

., the trust distributes to the four (4) children the net taxable capital gain, which is $250,000 each, in consideration for which each child will claim his or her capital gains exemption. ... We are unable to provide guidance on the operation GAAR because it requires the consideration of all of the relevant facts which we cannot assess in this context. ...