Search - consideration

In 2002, the debt is settled without consideration in favour of the employee. ... Although technically there is some argument that the employee's debt to his employer is a capital asset that should create a capital loss if it is settled without consideration, we are generally inclined to agree that the employer may deduct from its business or property income the amount forgiven on the same basis as the salary paid to the employee under subsection 9(1) I.T.A. ...

Under the common law, “a gift is a voluntary transfer of property owned by a donor to a donee, in return for which no benefit or consideration flows to the donor” (The Queen v Friedberg, [1992] 1 CTC 1, 92 DTC 6031 (FCA)). Generally, for purposes of sections 110.1 and 118.1, a gift under common law is made if a taxpayer has donative intent, and all three of the following conditions are satisfied: there must be a voluntary transfer of property to a qualified donee; the property transferred must be owned by the donor; and no benefit or consideration must flow to the donor. ...

Reasons: An interest in a related segregated fund trust is generally considered capital property and as such, eligible property as defined in subsection 85(1.1) for purposes of subsection 85(1). 2020 CALU CRA Roundtable – July 2020 Question 4- Segregated Fund Policies and Section 85 Rollover Background Subsection 85(1) of the Act allows for a tax-deferred transfer of “eligible property” to a corporation where the consideration includes shares of that corporation. ... A wants to transfer the interest in the segregated fund policy into a taxable Canadian corporation (Opco) under subsection 85(1) of the Act and will only receive common shares in Opco as consideration. ...

The result is that for the purposes of calculating the “annual gains limit” of the beneficiary, the amount calculated in element A takes into consideration the taxable capital gain designated by the trust under subsection 104(21.2) in respect of the beneficiary, in order to permit the beneficiary (if they are an individual other than a trust) to claim the capital gains deduction under subsection 110.6(2.1). ... The designations made under subsection 104(21.2) by Trust 1 in respect of each of Trust 2 and Trust 3 must be taken into consideration in order to determine the eligible taxable capital gains of Trust 2 and Trust 3, respectively. ...

Generally, when determining the source of a capital gain from the disposition of shares for foreign tax credit purposes under section 126 of the Act, certain factors as outlined in paragraph 1.65 of the Folio would be taken into consideration. However, where Canada has entered into a tax treaty with the country to whom taxes are paid, consideration must be given as to whether the provisions of the treaty may affect and modify the general sourcing rules. ...

(i) To the extent that the MAP cases currently being negotiated cover taxation years that precede the 2020 COVID-19 crisis, the CRA does not envision any impacts on these cases or the need to adopt special considerations on account of the COVID-19 crisis. ... CRA Response (A)(i) MAP cases that are currently being negotiated To the extent that the MAP cases currently being negotiated cover taxation years that precede the 2020 COVID-19 crisis, the CRA does not envision any impacts on these cases or the need to adopt special considerations on account of the COVID-19 crisis. ...

X exchange their common shares of the capital stock of the corporation in consideration for preferred shares of the capital stock of the corporation pursuant to subsection 51(1). ... X) then each subscribe for an equal number of new common shares of the capital stock of the corporation for nominal consideration. ...

In somewhat similar circumstances to the 2021 technical interpretations mentioned above, the CRA was asked about issuing discretionary dividend shares for nominal consideration. ... Response Given the broad scope of these provisions, whether any of subsections 15(1), 56(2) or 246(1) of the Act apply in respect of a particular tax planning arrangement (including those that involve life insurance policies and/or life insurance shares) can only be ascertained, on a case-by-case basis, after a comprehensive review and analysis of the relevant facts and agreements amongst the parties (including any valuation considerations, as applicable), as well as the objective of the tax planning and the intent of the parties (express or implied) in respect of the arrangement. ...

The following is assumed: a) Canco and non-arm’s length entities are subject to Canadian tax in relation to income earned on the sale of the residential condominiums; and b) Reasonable consideration is paid for the provision of the marketing services and that these costs are deductible against income earned in Canada. ... CRA Response Paragraph 95(2)(b) provides that where certain conditions are met: “the provision, by a foreign affiliate of a taxpayer, of services or of an undertaking to provide services (i) is deemed to be a separate business, other than an active business, carried on by the affiliate, and any income from that business or that pertains to or is incident to that business is deemed to be income from a business other than an active business, to the extent that the amounts paid or payable in consideration for those services or for the undertaking to provide services” The conditions turn in part on the deduction of the amount paid or payable for those services in computing the income from a business carried on in Canada and or in computing the foreign accrual property income of a controlled foreign affiliate. ...

A Canadian taxpayer receiving consideration for providing goods or services to related non-residents (“Outbound Charges”) is expected to comply with the arm’s length standard. Conversely, a Canadian taxpayer might pay consideration to related non-residents (“Inbound Charges”). ...