Search - consideration

When GAM proposed that SLT be merged with another fund managed by GAM in which non-residents were investors, it was agreed that, in light of the merged fund being subject to a higher level of fees than those to which SLT had been subject, that a Bermuda company owned indirectly by two Steinberg and Ludmer non-resident trusts would receive annual “fees” from the time of the 1994 merger that effectively represented a rebate of the higher fees imposed on the Canadian investors (although they were described to be consideration for services that, in fact, were never provided). ... They were enforceable, organized, foreseeable and customary since 1995. … [T]he contracts provided for services to be provided as consideration for the payments. … The argument put forward... that they are “nothings” for Canadian tax purposes because they are merely reputational payments arising in a non-business circumstance may ultimately be upheld by the Tax Court, but it is not so clear at this stage as to render the CRA’s position unreasonable. ...

When GAM proposed that SLT be merged with another fund managed by GAM in which non-residents were investors, it was agreed that, in light of the merged fund being subject to a higher level of fees than those to which SLT had been subject, that a Bermuda company owned indirectly by two Steinberg and Ludmer non-resident trusts would receive annual “fees” from the time of the 1994 merger that effectively represented a rebate of the higher fees imposed on the Canadian investors (although they were described to be consideration for services that, in fact, were never provided). ... …[T]he contracts provided for services to be provided as consideration for the payments. … The argument put forward by Bowman that they are “nothings” for Canadian tax purposes because they are merely reputational payments arising in a non-business circumstance may ultimately be upheld by the Tax Court, but it is not so clear at this stage as to render the CRA’s position unreasonable. ...

The tax advisor subsequently realized that these transactions gave rise to a deemed dividend under s. 84.1 to Thomas, and the parties petitioned to have the sale agreement rectified by adding Michael as a party and providing for a sale of Thomas’ 50 shares directly to Michael in consideration for a $2.75 million promissory note of Michael and for the immediate on-sale by Michael of those shares to 1086881 in consideration for 1086881 assuming the promissory note. ...

In the first case, the supply of recyclable scrap metal is made for consideration if the person acquiring it, namely a demolition company, attributes a value to that supply which it takes into account in the calculation of the price quoted for carrying out the demolition works (para. 40) with the consideration it received for its demolition work effectively being grossed up by this estimated amount. ...

In January 2015, CRA identified this deficiency, and in March 2015, PCA issued shares as consideration for the previous transfers and filed late amended elections with CRA and the ARQ. ... After having learned of the absence of share consideration from CRA in 2016, the ARQ issued mirror assessments (to which the taxpayers objected) to the CRA ones, and without reversing the penalty assessments (which Cusson did not object to) or refunding the penalty payments received. ...

This reporting was confirmed in the Court of Quebec on the basis inter alia that TA s. 54 (the equivalent of ITA s. 7(3)(a) established that the stock option rules (contained in TA s. 49 et seq.) constituted a “complete code” so that TA s. 422 (equivalent to ITA s. 69(1)(b)) did not apply to deem the “value of the consideration for the disposition” received by him to be equal to the options’ fair market value of $3M, rather than the nil proceeds in fact received. ... He also found to be “unconvincing” (para. 72) a further argument that s. 422 did not feed into s. 50 because it did not explicitly deem the FMV proceeds for the gift to be “consideration” received by the employee for the option disposition, as required by s. 50. ...

Agence du revenu du Québec, 2023 QCCQ 9061-- summary under Compensation Payments Summary Under Tax Topics- Income Tax Act- Section 9- Compensation Payments an in-kind damages payment treated the same as a sale of the transferred property The taxpayer (“Les Sommets”), which had received $400,000 for granting an option to a third party to acquire various properties, later settled an action in damages against it by the current holder of the option (“Solstice”), for failure to honour the option, by agreeing that, in consideration for the $400,000 referred to above, it would transfer a particular property (not covered by the option) to Solstice. ... As author Jacques Deslauriers writes: "Dation in payment has two effects: the extinction of an obligation and the transfer of ownership". … There is no published case law dealing with the tax treatment of a dation in payment, but from the foregoing, the Court concludes that this transaction must receive the same tax treatment as a sale. … The value of the consideration realized as a result of this transaction, i.e., the market value of the land transferred, established at $400,000, is taxable in the hands of Les Sommets as business income, since the transfer of the land it replaced was to occur as a sale in the ordinary course of business. ...

Agence du revenu du Québec, 2024 QCCQ 1195-- summary under Subsection 298(6.1) Summary Under Tax Topics- Excise Tax Act- Section 298- Subsection 298(6.1) request to change the basis of the ARQ assessments from s. 168(9) to s. 182 (ETA equivalents) was rejected Three weeks before trial, the ARQ auditor concluded that Autonun should have been assessed pursuant to QSTA s. 318 (similar to ETA s. 182, regarding amounts forfeited to a taxable supplier being deemed to be inclusive of tax), rather than pursuant to QSTA s. 92 (similar to ETA s. 168(9), regarding deposits not being taxable consideration until applied as consideration) on which the assessment of Autonun had been based. ...

Royal Bank of Canada v Commissioners for His Majesty's Revenue and Customs, [2025] UKSC 2-- summary under Article 12 Summary Under Tax Topics- Treaties- Income Tax Conventions- Article 12 restrictions on concept of royalty payment Before noting (at para. 110) that the OECD commentary on the wording of Art. 12 of the Model Convention supported a narrow view of the scope of immovable property in Art. 6, Lady Rose stated (at para. 109): Article 12(4) [of the Canada-UK Treaty] defines "royalties" as any payment received "as a consideration for the use of, or the right to use, any copyright, patent, trade mark... ... Further, the 2017 Commentaries make clear that where payments are made in exchange for an outright transfer of the rights, those payments do not fall within Article 12 because "the payment is not in consideration 'for the use of, or the right to use' that property and cannot therefore represent a royalty" (para 8.2). ...

For the purposes of this Article, "fees for included services" means payments of any kind to any person in consideration for the rendering of any technical or consultancy services (including through the provision of services of technical or other personnel) if such services: (a) are ancillary and subsidiary to the application or enjoyment of the right, property or information for which a payment described in paragraph 3 is received; or (b) make available technical knowledge, experience, skill, know-how, or processes or consist of the development and transfer of a technical plan or technical design. ... Technology will be considered "made available" when the person acquiring the service is enabled to apply the technology. … [P]ayment of consideration would be regarded as "fee for technical/included services" only if the twin test of rendering services and making technical knowledge available at the same time is satisfied. … [I]t is not even the case of the Assessing Officer that the assessee, i.e. recipient of services was enabled to use these services in future without recourse to BT Canada. ...