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The Directorate indicated that: CRA generally does not assess a s. 105 benefit arising from the use of the personal-use property by a beneficiary or person related to the beneficiary – but this administrative position would not extend to use of the property by an unrelated person, who would be required to include a benefit under s. 105(1) based on rent for comparable property, less any consideration paid for the use of the property (subject to the comments in IT-432R2, para. 11 as to computation of the benefit). ... X’s spouse, and that property is made available to the corporation’s shareholder, CRA indicated that the benefit question turned on whether (i) the trust specifically granted a right to use the property to the corporation, with such newly-created property then being distributed for not consideration by the corporation its shareholder without consideration, or (ii) the trust allowed the shareholder to use the property held by the trust. ...

X also held by Class E preferred shares of Corporations D (a holding company), whose participating shares were held by Trust 1 Proposed transactions Corporations A and B will purchase for cancellation a portion of its voting participating shares in consideration for notes, thereby generating a deemed dividend and a dividend refund of their respective RDTOH balances. Corporation A will also purchase for cancellation, in consideration for a note, a further portion of its voting participating shares so as to give rise to a deemed dividend that is elected to come out of its capital dividend account. ... X The estate will transfer its remaining shares of Corporations A and B to a newly-incorporated corporation (“Newco”) in consideration for notes and shares of Newco, electing under s. 85(1). ...

Child 1, Newtrust 1 and Trust 1 will transfer a portion of their common shares of Amalco to TC 1 under s. 85(1) in consideration for common shares of TC 1. Amalco will transfer a pro rata portion (determined on a net rather than gross FMV basis) of each of its two types of property (cash and near cash, and investment assets) on an s. 85(1) basis to TC 1 in consideration for assumption of liabilities and non-voting retractable preferred shares of TC 1. Such preferred shares will then be redeemed in consideration for a TC 1 note. ...

To assist the Estate with funding the Deceased’s terminal T1 income tax liability, the Estate transferred land and buildings owned by it to Opco on a s. 85(1) rollover basis in consideration for a demand, non-interest bearing promissory note (“Note 1”) of Opco and Class C preferred shares of Opco, with Opco then borrowing under a mortgage and repaying Note 1. ... The Estate will transfer its Class A common shares of Opco to a corporation newly incorporated by it (Newco) in consideration for a demand non-interest bearing promissory note (“Note 2”) and non-voting, redeemable and retractable Class C preferred shares of Newco, jointly electing under s. 85(1). The Estate will transfer its Class C preferred shares of Opco to Newco under s. 85(1) in consideration for non-voting, redeemable and retractable Class D preferred shares of Newco. ...

(f) applicable to transfer of shares for no consideration to new trust for same incapacitated minor beneficiary Background A special-needs minor child (CC4) of Mr. ... F2co will redeem Class E shares held by Fco for those shares’ PUC and ACB in consideration for the issuance of a non-interest bearing demand note in a principal amount equal to the estimated tax liability of TebC4 from the taxable dividend in 3 above. ... CC will settle a new trust for the exclusive benefit of CC4 (“NTebC4”) with a silver bar, and TebC4 will transfer its Class Z shares of Fco to NTebC4 for no consideration. ...

Proposed transactions One of the sisters will transfer, on a s. 85(1) rollover basis, her common and Class C shares, and her three brothers will transfer their Class C shares, of DC to TC1 in consideration for Class A voting participating shares, and non-voting preferred shares, respectively, of TC1. The other sister will transfer, on a s. 85(1) rollover basis, her common and Class C shares of DC to TC2 in consideration for Class A voting participating shares of TC1. The cash and near cash assets of DC (described as including “cash (including cash, if any, in investment accounts managed by investment advisors), accounts receivable (including income taxes receivable), certificates of deposit and similar short-term investments, marketable securities (other than those held as portfolio investments)”) and DC’s investment property (i.e., its portfolio of listed shares) will be transferred under s. 85(1) on a pro rata (and net FMV) basis to TC1 and TC2 in consideration for the assumption of liabilities (including the CDA note owing to the respective sister) and for non-voting preferred shares. ...

In particular: After the settling of MFT, which has redeemable retractable units, by a Canadian-resident third party, the Fund subscribes for MFT units for nominal cash consideration and the unit of the settlor is redeemed. Sub-Trust will transfer all its assets including the Class A LP Units and the GP I shares of Partnership, to MFT for no consideration, with no s. 107.4(3)(a)(i) election being made and with MFT electing under (f)(v) of “disposition” in s. 248(1) that para. ... Pursuant to a transfer agreement between the Fund, MFT and an agent for the MFT Unitholders, MFT will transfer its assets to the Fund at the “MFT Transfer Time” in consideration for Fund Units being issued to the MFT Unitholders in payment of the redemption proceeds for their Units; and immediately after the MFT Transfer Time, MFT will redeem all of the MFT Units held by the Fund and the MFT Unitholders except for one MFT Unit which the Fund will continue to hold until the winding-up of MFT in 7 below. ...

Canco2 will redeem all its preferred shares in consideration for delivering its Canco3 Promissory Note and common share of Canco3, giving rise to a s. 84(3) deemed dividend. ... XXXco1 will transfer a portion of its Class A Common Shares of Canco1, corresponding to the FMV of Canco1’s investment in Canco3, to USco3 in consideration for additional ordinary shares of USco3. ... USco3 will transfer the Class B Common Shares of Canco1 so received by it to Canco4 in consideration for additional common shares of Canco4, which will have a PUC equal to that of the transferred shares. ...

Each holder of a DC stock option will dispose of pro rata portions (based on the relative FMV of the Newco shares) of its option to Spinco and DC in consideration for the grant of replacement options. Such issuance by Spinco will be in anticipation of the transfer of all of the common shares of Newco to Spinco in 10 and will form part of the non-share consideration therefor. ... DC will acquire all of the shares (and options to acquire shares) of a Canadian subsidiary (“DC Sub 1”) held by minority shareholders in consideration for DC New SV Shares and/or cash. ...

Each holder of DC Equity Incentive Securities will dispose of such holder’s Butterfly Proportion thereof (being the ratio of the net FMV of the Distribution Property to be transferred by DC to SpinCo as per 5 below determined immediately before such transfer, to the net FMV of all property owned by DC immediately before such transfer) to SpinCo in consideration for corresponding SpinCo Equity Incentive Securities, and will dispose of the remaining portion thereof to DC in consideration for corresponding DC New Equity Incentive Securities. ... Each Participant will transfer to SpinCo each of their DC Preference Shares in consideration for one SpinCo Common Share. DC will transfer the Distribution Property (including its indirect interest in Project 1) to SpinCo in consideration for the assumption of liabilities of DC related to the Distribution Property and the issuance of non-cumulative redeemable retractable Spinco Preference Shares, with an s. 85(1) election made. ...