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5 July 2012 Internal T.I. 2010-0388551I7 F- Fiducie- retour de sommes-- summary under Subsection 75(2) Summary Under Tax Topics- Income Tax Act- Section 75- Subsection 75(2) s. 75(2) does not apply to an estate freeze as the corp does not own its treasury shares issued to the trust In finding that s. 75(2) did not apply to an estate freeze effected by Father in relation to shares of Holdco in favour of a family trust (the Trust), the Directorate stated: As a corporation is not the owner of its own shares before their issuance, it follows that such issuance by the corporation to a trust for consideration equal to their FMV does not generally constitute a transfer of property to which subsection 75(2) can apply. ... Kieboom, 92 DTC 6382 (FCA), subsection 75(2) nonetheless could apply when the subscription for the shares is not for consideration equal to their FMV. ...

23 April 2013 Internal T.I. 2012-0466081I7 F- Usufruct created under French legislation-- summary under Section 43.1 Summary Under Tax Topics- Income Tax Act- Section 43.1 gift of immovable subject to reservation of a usufruct gave rise to a disposition under s. 43.1 A Canadian-resident taxpayer who lived outside Canada made a transfer without consideration (the "Gift") to her adult children of a building and subjacent land situated in France (the "Building"), which had appreciated subsequent to its acquisition by the taxpayer. ... After noting that the creation of a usufruct governed by the C.c.f. did not give rise to a deemed trust under s. 248(3), CRA stated (TaxInterpretations translation): … the Taxpayer is deemed to have disposed of the Immovable for consideration equal to its FMV and that her children were deemed to have acquired the property for the same amount, all in accordance with the provisions of paragraphs 69(1)(b) and (c). ...

23 April 2013 Internal T.I. 2012-0466081I7 F- Usufruct created under French legislation-- summary under Paragraph 69(1)(b) Summary Under Tax Topics- Income Tax Act- Section 69- Subsection 69(1)- Paragraph 69(1)(b) disposition of all building under shared gift A Canadian-resident taxpayer who lived outside Canada made a transfer without consideration (the "Gift") to her adult children of a building and subjacent land situated in France (the "Building"), which had appreciated subsequent to its acquisition by the taxpayer. ... After noting that the creation of a usufruct governed by the C.c.f. did not give rise to a deemed trust under s. 248(3), CRA stated (TaxInterpretations translation): … the Taxpayer is deemed to have disposed of the Immovable for consideration equal to its FMV and that her children were deemed to have acquired the property for the same amount, all in accordance with the provisions of paragraphs 69(1)(b) and (c). ...

Madame sells some of her shares of her corporation, having a fair market value equaling 50% of the mortgage, to Monsieur in consideration for Monsieur assuming the 50% of the mortgage to which Madame had been subject. ... CRA responded: In order to answer the question, it must be established whether Monsieur, in assuming a portion of Madame's mortgage loan as consideration for the acquisition of the shares, incurred a new debt for which he was not previously liable and whether he had a legal obligation to pay interest that he was not previously legally required to pay. ...

30 April 2009 External T.I. 2008-0296721E5 F- Late filed election 85(7)- Amending transactions-- summary under Subsection 85(1) Summary Under Tax Topics- Income Tax Act- Section 85- Subsection 85(1) CRA will not accept s. 85 election based on self-help rectification to retroactively issue shares at transfer time An individual transferred an immovable to his corporation for non-share consideration. ... Consequently, CRA would not be able to accept a late election filed by the taxpayer and the Corporation under subsection 85(7) since, based on the Contract initially entered into by the taxpayer and the Corporation, one of the conditions set out in subsection 85(1) (i.e., the issuance by the Corporation of share consideration) would not have been satisfied. ...

Would the proceeds of disposition of the policy be determined on the basis that no consideration was given for the transferred policy? CRA responded that s. 148(7)(a) applied to deem Holdco: to have become entitled to receive proceeds of disposition equal to $240,000 (the greater of (i) the cash surrender value of the interest ($240,000), (ii) the FMV of any consideration for the interest (N/A), and (iii) the ACB of the interest to Holdco ($200,000).) ...

After stating that “[s]ince a corporation does not own its own shares prior to their issuance, it follows that the issuance of shares by a corporation to a trust for consideration equal to their FMV generally does not constitute a transfer of property to which subsection 75(2) could apply,” CRA went on to state: [T]o the extent that such a scenario does not contravene applicable corporate and trust law and that the Trust subscribed for shares of Opco and Newco for consideration equal to their FMV, it appears to us that the issuance of shares by Opco and Newco would not constitute a transfer of property to which subsection 75(2) would likely apply. ...

., including both the immediate non-resident parent (Foreign SpinCo Sub) and non-resident grandparent (Foreign SpinCo) of TC in a circular exchange of consideration- so that TC issued its shares to Foreign SpinCo Sub in consideration for the acquisition of special shares of DC from DC's non-resident parent (Foreign Sub 5). ...

28 October 2016 External T.I. 2016-0654331E5 F- Transfer of rights to income-- summary under Subsection 56(2) Summary Under Tax Topics- Income Tax Act- Section 56- Subsection 56(2) s. 56(2) could apply to shareholder of purchaser of lands if vendor did not pay FMV consideration for retaining rights to rents Upon a sale by A of leased land to a non-arm’s length corporation (Corporation A) in which A did not hold any shares, A and Corporation A agreed to a redistribution of income in which Corporation A undertook to pay to A all the related rental income. ... Thus, all the criteria for taxation of the shareholder of Corporation A under subsection 56(2) may be satisfied if the right to income was not disposed of for consideration equal to its fair market value. ...

(iii)(B) of Paragraph N that “the disposing corporation [FA1] receives no consideration for the share [of FA2] other than property that was, immediately before the merger, owned by the issuing corporation [FA2] and that, on the merger, becomes property of the new corporation [FA1].” ... [Thus] the property of FA3 would be received by FA1 as consideration for the shares of FA2. ...