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26 October 1990 Administrative Letter 90M11356 F- Loan Guarantee from Non-resident for No Consideration Unedited CRA Tags 214(15)(a), 245(2) CTF- 1990 Conference Report QUESTION I 78 Loan Guarantee from Non-resident for no Consideration A Canadian corporation ("Canco") borrows funds from an arm's length lender (the "lender"). Canco's non-resident parent corporation (the "parent") guarantees the loan for no consideration. ... Since the parent did not receive consideration for its guarantee of the loan, the parent will not be deemed by paragraph 214(15)(a) of the Act to have been paid interest on the loan. ...

Prosia, we are forwarding for your consideration and reply the August 15, 199], letter from the law firm of   24(1) concerning the possible application of the above noted penalty provisions to situations where an individual fails to copy with the requirements of 159(2) and thus becomes liable under 159(3). ... Prosia, he indicated that to the best of his knowledge, the above noted penalty provisions are not given consideration in connection with the collection procedures instituted as a result of the application of 159(3). ...

Consideration of requests of this nature involves an extensive and fully objective review of the facts of the particular situation by senior departmental officials in Head Office.  ... I wish to assure you that you will receive the utmost consideration possible in the resolution of your case. ...

They mean the amount of tax payable under the provincial Act but for sections 120.1, 121 and 122.3 of the federal Act which are to be taken into consideration, so that the amount of provincial income tax for the calculation could be greater. ... Should someone ask that these other items be taken into consideration, then the request should be respected.  ...

It is your view that, as the Right constitutes "consideration other than shares of a particular class of the capital stock of the purchaser" as found in paragraph 85.1(2)(d) of the Act, subsection 85.1(1) of the Act does not apply in respect of the above exchange by virtue of that paragraph. Comments We agree with your conclusion that the Right will be "consideration other than shares of a particular class of the capital stock of the purchaser" as found in paragraph 85.1(2)(d) of the Act.  ...

The basic rule under new subsection 84.1(1) is that the maximum amount that can be received by the transferor from the transferee corporation as proceeds in the form of any  non-share consideration and the paid-up capital of the share consideration is restricted to the greater of the paid-up capital of the transferred shares and what might be referred to as the transferor's arm's length actual adjusted cost base of the shares...      New paragraph 84.1(1)(b) treats the purchaser corporation as having paid a dividend to the transferor where the aggregate of the amount of the increase in the legal paid-up capital of its shares arising as a result of the share transfer and the fair market value of the non-share consideration given by it for the transferred shares  exceeds the total of      (a)  the greater of the adjusted cost base, as modified under new paragraph 84.1(2) (a) or (a.1), to the transferor of the transferred shares and the paid-up capital of the transferred shares, and       (b)  the total paid-up capital reductions required by paragraph 84.1(1)(a) to be made by the purchaser corporation.       ...

Les Actionnaires recevront de Holdco, en guise de considération, uniquement des actions ordinaires de cette dernière. 3. ... Constructeurs recevra de Holdco comme unique considération des actions privilégiées de Holdco. 4. ... Constructeurs recevra de ImmeubleCo en guise de considération des actions privilégiées de ImmeubleCo. 5. ...

Jolie of your office, we are forwarding for your consideration and reply the yellow file folder containing 24(1) letter of October 31, 1989 addressed to the Honourable Otto Jelinek. ...

In determining a question of fact non-arm's length relationship (pursuant to paragraph 251(1)(b) of the Act), persons must be dealing with each other at a particular time and the transaction under consideration must be a real transaction rather than a deemed transaction. ... Treating shares issued pre-1972 differently than those issued post-1971 seems unreasonable in this circumstance considering that the Company was a shell company when it was acquired by XXXXXXXXXX Yet, the literal interpretation of the Act strongly suggests that consideration should be given only to the transaction in which the taxpayer acquired the shares and not to any previous transaction. ... " Therefore, we note that although the object and spirit of a provision is one consideration to be taken into account in interpreting the words of a provision, it is not the only consideration. ...

Where a shareholder of a corporation guarantees for no consideration the payment of amounts to be paid by the corporation, this act alone would normally not represent a payment to a third party to fund the payments.  It is our view that it would represent such a payment, however, if the shareholder received consideration for the guarantee. ...