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7 October 2016 APFF Financial Strategies and Instruments Roundtable Q. 1, 2016-0651771C6 F- Critical Illness Insurance Unedited CRA Tags 15(1) Principales Questions: Whether subsection 15(1) could apply to the transfer (without consideration) by a corporation of its critical illness insurance policy to its sole shareholder? ... Raisons: No consideration paid by the shareholder. Table ronde sur la fiscalité des stratégies financières et des instruments financiers du 7 octobre 2016- APFF Congrès 2016 Question 1 Transfert d’une police d’assurance maladies graves par une société par actions à un actionnaire Une société par actions exploitante (« Opco ») a souscrit, il y a plusieurs années, à une police d’assurance maladies graves à l’égard de son unique actionnaire, qui participe très activement aux opérations courantes de la société. ...

2 May 2011 External T.I. 2011-0394081E5- Capital Gains Reserve Unedited CRA Tags 40(1)(a); 248(1) "joint spousal or common-law partner trust" and "alter ego trust"; 40(1.1) Principal Issues: Whether a taxpayer may claim a capital gains reserve pursuant to subparagraph 40(1)(a)(iii) when part of the consideration received as proceeds of disposition in the form of a mortgage is transferred to a trust. ... The Taxpayers sell their respective interests in land to an arm's length party and as part of the consideration, the Taxpayers take back a mortgage with a term exceeding 5 years, secured by the land ("Mortgage"). ...

Accordingly, there are three options available to the estate, namely: The estate could make an assignment into bankruptcy, in which case the trustee in bankruptcy would make the decision as to whether an objection or appeal should be pursued; The executor could personally fund the services of an accountant and in the event that there is a decrease in tax payable, consideration could be given to permitting the fees to be paid out of the assets of the estate; or The executor could use estate assets to fund the services of an accountant, but would do so at the risk of being held liable under subsection 159(3). There are positive and negative aspects to each of these options which will require consideration from the legal representative. ...

10 January 2012 External T.I. 2011-0409011E5- Principal business test in 1100(12)(b) of the Regs Unedited CRA Tags 1100(12)(b) Principal Issues: Whether one should take into consideration the business of the partnership when determining whether all of the corporations that are partners in a partnership meet the principal business test set out in paragraph 1100(12)(a) of the Regulations for purposes of determining whether a partnership qualifies for the exemption under paragraph 1100(12)(b) of the Regulations. ... Ultimately, the determination of whether a corporation meets the PBREC test is a question of fact that involves the consideration of various factors, which might include, but is not limited to, the principal source of the corporation's income. ...

In Southwind, the Federal Court of Appeal endorsed consideration of a series of factors that would be relevant, but not necessarily of equal significance. ... Instead, a sole proprietor should determine whether his or her income is tax-exempt by reference to the considerations discussed above. ...

On the subsection 85(1) transfer of the properties to the corporation, each of A and B will receive as consideration shares of the corporation with a fair market value (FMV) equal to the FMV of their respective property. 3. ... The transferor is permitted to dispose of the property to the transferee for an agreed amount, which may be other than the fair market value of either such property or the consideration received for it. ...

Having regard to paragraph 84.1(1)(a), no amount will be added by either SiblingCo to the stated capital account maintained for any particular class of shares of its capital stock issued to a Trust in consideration of the transfer by the Trust of its DC common shares. 14. In the event that shares of a SiblingCo are issued to a particular Trust in consideration for the transfer by it of DC common shares in accordance with Subparagraph 13(b) above, the particular Trust will jointly elect with that SiblingCo, in prescribed form and within the time referred to in subsection 85(6), to have the rules in subsection 85(1) apply to such transfer. ...

The amount of the transferee's liability is equal to the lesser of the fair market value of the property transferred less the consideration paid, and the transferor's total tax liability owing in the year of the transfer or any preceding year. ... In the present case, there is no domestic service obligation for which the payments by the taxpayer can be viewed as constituting consideration. ...

Therefore, it must represent (i) an undertaking by one person, (ii) to indemnify another person, (iii) for an agreed consideration, (iv) from a loss or liability in respect of an event, (v) the happening of which is uncertain. ... The consideration given by the employee is considered to be the employee's covenants as found in the collective agreement or in the contract of service. ...

Generally, a plan will be considered a superannuation or pension fund or plan where contributions have been made to the plan by or on behalf of an employer or former employer of an employee in consideration for services rendered by the employee and the contributions are used to provide an annuity or other periodic payments on or after the employee's retirement in consideration for his or her employment services. ...