Search - consideration

CRA responded: An apportionment of a royalty payment agreed to by arm’s length parties under a mixed contract, to the extent that it is reasonable and realistic, in the sense that it is reflective of the actual consideration paid for a copyright described under subparagraph 212(1)(d)(vi), will generally be accepted by the CRA. … In determining if an apportionment provided under a mixed contract is reflective of the obligation of the parties under subsection 212(1), consideration would be given, amongst others, to the terms of the mixed contract and to whether the parties have divergent interests in respect of this apportionment. ...

Without referring to s. 68, CRA stated: An apportionment of a royalty payment agreed to by arm’s length parties under a mixed contract, to the extent that it is reasonable and realistic, in the sense that it is reflective of the actual consideration paid for a copyright described under subparagraph 212(1)(d)(vi), will generally be accepted by the CRA. … In determining if an apportionment provided under a mixed contract is reflective of the obligation of the parties under subsection 212(1), consideration would be given, amongst others, to the terms of the mixed contract and to whether the parties have divergent interests in respect of this apportionment. ...

The estate transferred its Class F shares of the Corporation to Newco in consideration for four notes maturing 3, 6, 9 and 12 months after the amalgamation below, and in consideration for voting participating Class A shares of Newco, electing under s. 85(1), and realizing a capital loss (which, by virtue of s. 40(3.61), was not denied under s. 40(3.6)) that was carried back pursuant to an election under s. 164(6). ...

Then: The estate transferred all its shares of the corporation to Newco in consideration for four notes maturing 3, 6, 9 and 12 months after the amalgamation below (and in consideration for voting common shares of Newco, with an election filed under s. 85(1),)- and with the resulting capital loss (which was not denied under ss. 40(3.61) and (3.6)) being carried back under s. 164(6). ...

Siblings 1 and 2 will each transfer his DC common shares on a s. 85(1) rollover basis to TC1 and TC2, respectively (each incorporated by the respective Sibling for one common share) solely in consideration for TC1 or TC2 common shares. DC will contemporaneously transfer, on a s. 85(1) rollover basis, 1/3 of each of its types of property (investment, and cash, property) in consideration solely for non-voting redeemable retractable special shares to each of TC1 and TC2. ...

A proposed post-mortem pipeline entailed the estate redeeming some of its shares so as to use Holdco’s GRIP and to generate a s. 164(6) loss carryback, then transferring its shares to a Newco created by it in consideration for notes whose principal would be subject to the s. 84.1(2)(a.1) limitation having regard to the previous s. 110.6(2.1) claims, and shares as to the balance of the consideration received on a s. 85(1) rollover basis. ...

The consideration paid by the shareholders would be a proportionate fraction of the property’s nominal appraised value. CRA ruled inter alia that there would be no s. 15(1) benefit to the extent that the FMV of the share of the real property so transferred to each shareholder was equal to or less than the FMV of the consideration paid therefor, but did not rule on whether the corporation qualified as an NPO. ...

Investco will redeem the Class C shares in consideration for a note, and designate a portion of the resulting deemed dividend to be an eligible dividend. ... Following the incorporation by the executors of Newco, the estate will transfer its Class A and B shares to Newco under s. 85(1) in consideration for a non-interest-bearing note and for Class A shares of Newco. ...

Proposed transactions The trust will transfer its preferred shares on a s. 85(1) rollover basis to a “Newco” (incorporated by Beneficiaries 1 and 2) in consideration for a non-interest-bearing demand note, and non-voting non-cumulative redeemable retractable preferred shares of Newco. Beneficiaries 1 and 2 will transfer their common shares of Opco to Newco on a s. 85(1) rollover basis in consideration for non-voting non-cumulative redeemable retractable preferred shares of Newco. ...

CRA stated: Where an agent remunerates a principal's employee, the amount of money the principal pays the agent as a reimbursement for the employee's wages is not consideration for a supply and therefore is not subject to tax. Therefore, since Company A acts as an agent of Company B and Company C in remunerating the Employees, the amount of money Company B and Company C pay Company A as the reimbursement for the Employees' wages is not consideration for a supply and would not be subject to tax. ...