Search - consideration

CRA considers that a dividend-in-kind of a life insurance policy by a corporation (Aco) to its shareholder is made for no consideration for purposes of s. 148(7)(a)(ii)(B), so that on the dividend-in-kind, the policy was deemed to be disposed of for the greatest of its ACB, CSV and the (nil) consideration received, or $150. However, where a trust transfers the policy to its beneficiary, the beneficiary (Xco) is regarded as giving consideration for the transfer that is all or any part of the beneficiary's income or capital interest, as applicable. Here, it would be reasonable to consider that such consideration had an FMV of $250. ...

The dividend-in-kind of the life insurance policy by a corporation (Aco) to its shareholder is made for no consideration for purposes of s. 148(7)(a)(ii)(B), so that on the dividend-in-kind, the policy is deemed to be disposed of for the greatest of its ACB, CSV and the (nil) consideration received- or $150. However, where a trust transfers the policy to its beneficiary, the beneficiary (Xco) is regarded as giving consideration for the transfer that is all or any part of the beneficiary's income or capital interest in the trust, as applicable. Here, it would be reasonable to consider that such consideration had an FMV of $250. ...

25 August 2025- 11:53pm Reporting platform operators may be required to infer the consideration paid to platform vendors from the dollar value of their orders Email this Content The operator of a proprietary digital platform, who was also an equipment manufacturer, allowed independent vendors to list their goods for sale on the platform to select customers. ... CRA indicated that if the reporting platform operator knew the total value of orders placed with the seller, this could make the seller's consideration "reasonably knowable" to the reporting platform operator as per the definition of consideration. ... Summaries of 30 May 2025 External T.I. 2025-1050201E5 under s. 288(1), s. 282(1) – consideration, active seller. ...

16 December 2012- 1:13pm CRA treats construction services provided in exchange for a development permit as being made for nil consideration for GST/HST purposes Email this Content A subdivision developer who pays a development levy of a municipality will be considered to have made an exempt supply for HST/GST purposes of cash in consideration for an exempt municipal service.  However, its provision of municipal improvements such as roads generally will be treated as the making of a taxable supply for nil consideration rather than in consideration for the (presumably valuable) permit, so that no GST or HST is payable by the municipality. ...

29 December 2014- 3:58pm BCE proposed acquisition of GLENTEL does not include a de minimis cash consideration component Email this Content In the proposed BCE acquisition of GLENTEL for ½ of a BCE share or cash of $26.50, per GLENTEL share at the GLENTEL shareholder’s option (but with the overall consideration being fixed on essentially a 50-50 basis), a GLENTEL shareholder potentially could receive only share consideration, so that the s. 85.1 rollover would be available. This contrasts with other offerings (e.g., First Quantum/Lumina and Loblaw/Shoppers Drug Mart) where a minimum (and somewhat nominal) cash consideration was specified, so that all target shareholders wishing rollover treatment would be required to make a s. 85 election. ...

25 October 2021- 1:50am CRA indicates that “consideration … received” in s. 118.1(13)(c) includes a s. 84(3) deemed dividend Email this Content Under s. 118.1(13)(c), where a qualified donee that disposes of non-qualifying securities (“NQS”) that were gifted to it, the amount of the original gift will be deemed in some circumstances to equal the fair market value of the “consideration” received by the donee for that subsequent disposition. CRA indicated that, unless the context indicates otherwise, “the notion of ‘consideration’ is broad enough to encompass any amount, good or service received upon the disposition of property,” so that the “consideration” received by the donee would not be limited to s. 54 proceeds of disposition, and would include a deemed dividend received by the qualified donee under s. 84(3) on a redemption of shares. ...

The Crown itself made what might seem like the opposite argument, namely, that on the redemption by Oldco of its preferred shares held by Newco for a $30 million note, “no consideration was effectively given to Oldco in return.” ... Noël CJ stated that there indeed was consideration going the other way in the form of “Newco in turn … surrender[ing] the shares which had a corresponding $30 million value in its hands.” ... In rejecting the Crown’s submission that the determination as to whether full consideration had been paid by Newco should be determined by the “overall result” produced by the series of transactions, Noël CJ stated that “the adequacy of the consideration given must be measured against the value of the property transferred by way of a ‘snapshot’ taken at the point in time when the transfer takes place.” ...

5 May 2025- 11:42pm BC Hydro – Tax Court of Canada finds that ETA s. 182 did not apply to a payment made in consideration for modifying an agreement to optionally extend its term Email this Content BC Hydro, which had entered into an electricity purchase agreement (EPA) with an independent power producer for the supply of electricity at a particular project in BC, agreed with that supplier that the EPA would be amended to provide, inter alia, that in consideration for the payment by BC Hydro of the sum of $8.5 million by the date 30 days after the project became operational, BC Hydro would have the option to extend the term of the EPA by a further 16 years. ... In rejecting this submission, Bocock J found that the payment was consideration for the optional term extension and therefore was consideration for a "taxable supply per se. ...

23 April 2015- 9:40am CRA recognizes that the s. 7 rules apply to agreements to sell shares for no cash consideration Email this Content CRA recognizes (e.g., in IT-113R4, para. 7) that the s. 7 rules can apply where an employer issues its shares to an employee for no monetary consideration. After up to three years of deliberation, CRA has concluded that the s. 7 rules can also apply to an employee incentive arrangement under which an employer purchases shares of a non-arm's length corporation (e.g., an open-market purchase of its non-resident parent’s shares) and grants those shares to the employees for no monetary consideration. ...

18 May 2017- 11:52pm CRA rules that a fee charged on assigning receivables was part of the GST-exempt consideration for the receivables sale Email this Content A car dealer enters into contracts with customers, which could be conditional sales contracts, instalment sales contracts, credit agreements or finance contracts with instalments, and immediately sells each contract to a lender for cash consideration. Consistently with Canada Trustco, CRA found that a separate fee charged by the car dealer on selling the contracts was also part of the consideration for the assignment, so that the fee was also exempted from GST/HST. ...