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14 June 2001 External T.I. 2000-0044935 F- Coût des actions-- summary under Adjusted Cost Base Summary Under Tax Topics- Income Tax Act- Section 54- Adjusted Cost Base cost to Pubco of CCPC shares acquired by it in exchange for treasury shares equal to the addition to its stated capital account, rather than the Pubco shares’ FMV The requisite number of shareholders of Opco (a private corporation) agreed, at a time that the Pubco shares were trading for $2 per share, to accept an offer of Pubco to acquire each of their shares in consideration for three Pubco shares plus $4 of cash (or at their option, solely for $10 of cash). ...

Paragraph 5 of section 13 of the QCA provides that "[i]n the absence of other provisions in that respect in the constituting act or by-laws of the company, the shares without par value may be issued and allotted from time to time for such consideration, payable in cash, property or services, as may be fixed by the board of directors of the company…” Consequently, the determination of the issue price is left to the discretion of the Board of Directors and is not necessarily the market value of such shares. … [T]he amount paid is the stated capital in respect of the Class A shares which reflects the price agreed between the corporation and the debenture holders. ...

CCRA was prepared to accept that s. 34.1(1) did not apply, provided that the dissolution of ABC and the creation of the new partnership was not motivated by tax considerations. ...

18 April 2002 Internal T.I. 2002-0118827 F- DEBENTURES CONVERTIBLES-- summary under Paid-Up Capital Summary Under Tax Topics- Income Tax Act- Section 89- Subsection 89(1)- Paid-Up Capital PUC of shares issued on debenture conversion equal to consideration stated in debenture indenture and in financial statements, rather than the FMV of shares stated in resolution The corporation, on the conversion by holders of convertible debentures that it had previously issued, passed a resolution stipulating that the stated capital of the shares issued by it on the conversion was equal to the shares’ market value at that time, and took a deduction under s. 20(1)(f)(ii) based on the excess of such market value over the face value of the converted debentures. ...

. … If a taxpayer is motivated by tax considerations when he or she enters into a business or property venture, this will not detract from the venture's commercial nature or characterization as a source of income under the Act. ...

11 December 2002 Internal T.I. 2002-0173007 F- Observation aux commentaires (OCDE)-- summary under Article 12 Summary Under Tax Topics- Treaties- Income Tax Conventions- Article 12 Canada’s withdrawal of its observation on Art. 12 on March 28, 2002 was prospective, and did not affect its right to impose withholding tax on payments for use of a secret process prior to that date The TSO proposed to impose withholding tax (at a Treaty-reduced rate of 10%) on consideration paid prior to March 28, 2002 by a Canadian resident, for the granting by a UK resident of permanent non-exclusive licences allowing the Canadian resident to use, download, execute, employ and store software owned by the non-resident, on the basis that the payments met the definition of "royalties" in Art. 12(4) of the Canada-UK convention, since they were regarding the use of a secret formula or process. ...

Regarding the likely nonapplication of s. 56(2) respecting such dividends, CCRA stated: [I]n the absence of a sham … and to the extent that sufficient consideration was given for the shares at the time they were issued, subsection 56(2) would generally not apply to dividend income since, until a dividend is declared, the profits belong to the corporation as retained earnings. ...

2016 Ruling 2016-0630761R3- Transfer of Shares-- summary under Paragraph 5901(2)(b) Summary Under Tax Topics- Income Tax Regulations- Regulation 5901- Subsection 5901(2)- Paragraph 5901(2)(b) stated capital distribution from FA treated as pre-acq dividend A foreign affiliate (New FA) of a Canadian corporation (ACo) transferred all the shares of FA1 to a Canadian-resident subsidiary (BCo) of ACo in consideration for a note of BCo whose amount equalled the sum of the relevant cost base of the FA1 shares and the net surplus (being exempt surplus) of FA1 (such sum, the “Transfer Amount”). ...

2016 Ruling 2016-0630761R3- Transfer of Shares-- summary under Subsection 15(1) Summary Under Tax Topics- Income Tax Act- Section 15- Subsection 15(1) no conferral of benefit where CRA required sideways transfer to occur at less than FMV A foreign affiliate (New FA) of a Canadian corporation (ACo) transferred all the shares of FA1 to a Canadian-resident subsidiary (BCo) of ACo in consideration for a note of BCo whose amount equalled the sum of the relevant cost base of the FA1 shares and the net surplus (being exempt surplus) of FA1 (such sum, the “Transfer Amount”). ...

27 November 2018 CTF Roundtable Q. 5, 2018-0780041C6- GAAR on PUC reduction-- summary under Subsection 84(3) Summary Under Tax Topics- Income Tax Act- Section 84- Subsection 84(3) no challenge of a reduction of PUC of shares of DC held by TC before redemption Shareholders of DCco transfer shares of DCco having an aggregate PUC of $10,000 and an ACB of $1,000 and a FMV higher than $10,000 to TCco in consideration for shares of TCco and as part of a distribution of property of DCco to TCco. ...