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14 August 2019- 1:00am SLFI Group – Federal Court of Appeal finds that the Invesco group successfully reduced their HST-taxable management fees by having a third party take over the funding of broker commissions Email this Content A non-resident bank (Citibank) agreed to fund the payment of the upfront brokerage commissions that were payable on the issuance of units in the Invesco/Trimark funds (the “Funds”) in consideration for receiving an assignment of a portion of the amounts that otherwise would have been earned by the Invesco manager as management fees. More precisely, the manager agreed to reduce its management fees (i.e., reduce its percentage charge of NAV), and the Funds agreed to pay the same percentage amounts to a special purpose non-resident Citibank-formed vehicle (“Funding Corp”) essentially in consideration for Funding Corp paying the brokerage commissions. ... Therefore, the consideration paid by the Funds to Funding Corp was tainted as Funding Corp was providing a management service. ...

., standby charges) payable by a borrower as consideration for the lender agreeing to lend money or make money available (arguably, under the definition of “restrictive covenant” such an agreement “affects … the … provision of property … by the taxpayer” (i.e., of funds by the lender) or “affects … the acquisition of property … by the taxpayer” (i.e., the lender’s acquisition of the debt obligation)) consent payments to creditors, e.g., to permit a particular transaction or loosen a financial covenant (such “agreement could be viewed as affecting the (ongoing) provision of property by the taxpayer, being the loaned funds, especially if the consent relates to an amendment of a covenant that could otherwise have been breached and allowed … acceleration …”) in the context of a distress restructuring, an additional payment made to a debt holder who agrees to exchange for the securities of the restructured debtor by a specified date, e.g., the receipt of additional shares on a debt for shares restructuring (the additional shares “may properly be viewed as consideration for the debenture holder having agreed to consent to the restructuring plan by the specified date, rather than as consideration for the exchange itself, having regard to paragraph 68(c).”) ...

However, to promote products or as a customer service gesture, the supplier also issues “complimentary gift cards” whose “complimentary value,” when applied by the customer, is treated by it as consideration for the goods or services supplied. ... The supplier accepts the complimentary value as full or partial consideration for a supply of property or service. ... CRA went on to note that any top-up value added to the gift card would generally be considered the issuance or sale of a gift certificate for consideration and, when redeemed for a supply of property or services, would be deemed to be applied as money as described in s. 181.2. ...

.: 1) Foreign Services transfers the DC preferred shares directly to TC as consideration for the shares of Foreign Spinco issued in step 3; 2) TC issues common shares to Foreign Spinco as consideration for those DC shares; and 3) As consideration for the TC shares, Foreign Spinco issues shares to Foreign Services. ...

13 November 2013- 11:50am CRA finds that s. 95(2)(a)(ii)(D)(I) does not apply to purchase-price indebtedness Email this Content An immediate LLC subsidiary of Canco (NR1) sold a subsidiary engaged in an active business (NR6) to a great-grandchild (NR4) in consideration for Note1 of NR4, and then sold Note1 to its immediate subsidiary (NR2) in consideration for Note2 of NR2. ...

17 January 2013- 10:44am A new trend – Alamos tax disclosure excludes CRICs Email this Content Alamos (which has only foreign mining properties) has structured its offer for Aurizon (which on an aggregate basis provides 50% share consideration (Alamos shares) and 50% cash consideration) so as to ensure that the s. 85.1 rollover is not available except for shareholders who receive only Alamos shares.  ...

In this regard, Owen J stated: [I]n my view the words “consideration given for the property”, when read in the context of the entire subsection, can only mean consideration given by the transferee for the property regardless of who receives that consideration. … Owen J then turned to the Crown’s GAAR position, which was that there was an abusive avoidance of s. 160, having regard to the proposition that s. 160 would have applied to the taxpayers if they had instead received the Property as a dividend on their shares. In rejecting this alternate transaction, Owen J stated: The role of the subsidiaries as single purpose corporations created to be sold to WTC precluded a dividend of any kind as that would be offside the terms of the sale for which the subsidiaries were expressly created is a transfer of property without consideration. ...

23 October 2012- 2:41pm CRA confirms that the s. 156 GST/HST election may be available on an asset transfer to a Newco Email this Content In its new Memorandum on the intra-group election for nil consideration (s. 156), CRA indicates that it is available for the transfer of assets by an existing exclusively-commercial registrant to a "Newco" subsidiary, provided that before the transfer the Newco is doing something in connection with a proposed exclusive commercial activity.  ... Summary of GST/HST Memorandum 14.5 "Election for Nil Consideration" September 2012 under ETA, s. 156(1). ...

22 September 2014- 10:30am Hudbay may settle warrants on its common shares by delivering shares equal to their in-the-money value Email this Content In July, Hudbay acquired most of the common shares of Augusta Resources, and issued 0.315 of a Hudbay common share and 0.17 of a warrant to acquire a Hudbay common share in consideration for each Augusta share. The current second stage squeeze-out transaction was complicated by the need to provide the same warrant consideration. ...