Search - consideration

In order to transfer interest expense from Holdco to the Opco business, Holdco transfers its common shares of Opco to a newly incorporated Canadian subsidiary ("Newco2") in consideration for a promissory note of Newco2 and for share consideration, and Newco2 and Opco then amalgamate. ...

2002 Ruling 2002-0177163- Subsection 87(4)- S/H Rights Plan-- summary under Subsection 87(4) Summary Under Tax Topics- Income Tax Act- Section 87- Subsection 87(4) Rights under a shareholder rights plan of Parent received by shareholders of Target on a triangular amalgamation of Target, a subsidiary of Parent and Parent would not constitute "consideration" for purposes of s. 87(4) given that the rights were of little or no value and given that: "The Amalgamation Agreement will provide that the shares of Parent and Amalco... will be the sole consideration for the exchange. ...

" Holdco will redeem the Class B preferred shares held by Sister, Brother 1 and Brother 2, in consideration for a demand non-interest bearing note, with Holdco making eligible dividend designations. Holdco will transfer its GICs to Investmentco in consideration for Class B non-voting retractable preferred shares, with the sale agreement containing a price adjustment clause, and with a s. 85(1) election made. Holdco will redeem the Class B preferred shares which Newco acquired in 2, in consideration for a demand non-interest bearing note ("Note 2"), with Note 2 containing a price adjustment clause. ...

Holdco 1, Holdco 2, Holdco 3, Opco 3 and Holdco 4 incorporate Holdco and (following the incorporation of Realtyco by Holdco) transfer their shares of Opco to Holdco on a rollover basis under s. 85(1) in consideration for Class A common shares of Holdco. ... Holdco transfers its Class B shares of Opco to Realtyco on a s. 85(1) rollover basis in consideration for Class A common shares of Realtyco. ... Realtyco redeems the Class C shares held by Opco in consideration for Note 2. ...

Pursuant to the agreement between Forco 2, Canadian TC and Foreign DC for the “First Three-Party Share Exchange,” Forco 2 will transfer the Canadian DC Special Shares to Canadian TC and it will be further agreed that Canadian TC will acquire such Canadian DC Special Shares in consideration for issuing Canadian TC Common Shares to Foreign DC; Forco 2 will transfer all of the Canadian DC Special Shares to Canadian TC in consideration for the issuance in c; and Foreign DC will issue units to Forco 2 in consideration for the issuance in a. (There is no Canadian tax reason for transferring the Canadian DC Special Shares to Canadian TC by way of the First Three-Party Share Exchange rather than in consideration for Canadian TC Common Shares.) ... Under the “Second Three-Party Share Exchange,” Foreign Pubco will transfer the Foreign DC units to Foreign TC in the following manner: Foreign TC will agree to pay to acquire Foreign DC units from Foreign Pubco in consideration for issuing Foreign TC shares to New LLC; Foreign Pubco will agree to transfer the Foreign DC units to Foreign TC in consideration for being issued New LLC units; and New LLC will agree to issue units to Foreign Pubco as the purchase price for the Foreign TC Common Shares issued to it. ...

In finding that the rule in s. 153(3) did not apply, CRA stated: …the crude oil supplied by [Company B] does not serve as consideration for the supplies of crude oil by [Company A] to [Company B]….[T] here is a difference between property supplied as consideration for other property, and property which is supplied for which a credit is given for use against future supplies. ...

21 July 2014 Ruling 142194 [electricity not a product of water]-- summary under Subsection 162(2) Summary Under Tax Topics- Excise Tax Act- Section 162- Subsection 162(2) electricity not a product of water As part consideration for its services to Company A, an engineering firm receives from Company A a royalty equal to a percentage of the gross proceeds from the electricity generated by the contemplated hydroelectric plant. After ruling that s. 162(2)(c) does not apply to the supply (so that the royalty payments are consideration for a taxable supply of an engineering study), CRA stated: Payments made to the Engineer pursuant to the Agreement are not computed by reference to the production from a natural resource as required by this paragraph. ...

Preliminarily to a Plan of Arrangement (referred to in Steps 4 to 7 of the above diagram and summarized under s. 80(1)- forgiven amount): Aco will transfer the Bco Notes (having an adjusted cost base equal to their principal) to a newly-incorporated CBCA corporation (Newco1) in consideration for the issuance of Newco1 common shares Aco will transfer its Newco1 common shares to Bco in consideration for the issuance of a nominal number of Bco common shares the paid-up capital of the Newco1 common shares will be reduced Newco1 will be wound-up into Bco, with Bco making a s. 80.01(4) election Rulings: ss. 40(2)(e.1) and 53(1)(f.1) will apply to the dispositions of the Bco Notes to Newco1, so that their ACB is preserved the extinguishment of the Bco Notes on the winding-up of Newco1 will not give rise to a forgiven amount (per s. 80.01(4)) ...

2012 Ruling 2011-0431101R3- Cross-border spin-off butterfly-- summary under Paragraph 20(1)(c) Summary Under Tax Topics- Income Tax Act- Section 20- Subsection 20(1)- Paragraph 20(1)(c) interest deduction following b/f cross-redemption On a butterfly reorganization, the non-resident parent of the distributing corporation (DC) exchange its common shares of DC for new common shares and DC Special Shares, and then transfers its DC Special Shares to the transferee corporation (TC) in consideration for TC common shares. On the subsequent butterfly transfer of assets by DC to TC, the consideration includes the assumption of liabilities as well as the issuance by TC of preferred shares. ...

2010 Ruling 2009-0330901R3- Reorganization of XXXXXXXXXX-- summary under Subsection 107(2.1) Summary Under Tax Topics- Income Tax Act- 101-110- Section 107- Subsection 107(2.1) recognition of capital loss on distribution of capital gain through redemption of most of trust units by corporate unitholder A unit trust (Trust 1), after selling units of a subsidiary LP to its parent (Subco) in consideration for a note, purchases for cancellation most of its units held by Subco in consideration for the transfer to Subco of debt owing by Subco. ...