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Corporations B and C wish to amalgamate but are unable to do so because of various financial, legal and other considerations. 4.      ... As consideration for corporation A issuing its common shares to the public on the above amalgamation, corporation B issues additional common shares to corporation A. 8.      ... As consideration for corporation A issuing shares to the public, corporation A issues additional shares to corporation A. ...

In the case now under consideration by you it is essentially a question of fact as to whether the employer carried on one of the specified kinds of businesses in the United States and as to whether the employee performed all or substantially all the duties of his employment in the United States in connection with a contract under which his employer carried on such business. ... In the case under consideration there may also be some question as to whether the individuals are employees of 24(1) We are uncertain what is meant by your reference to "The individuals are transferred to the 24(1) payroll. ... A determination of which company is the employer cannot be based solely on which company pays the salary and indeed in making this determination considerations such as who controls and directs the employee and who the employee reports to are generally more important. for DirectorReorganizations and Non-Resident DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch ...

., consideration would be given to substance over form).  The limited information contained in your correspondence would lead us to conclude that the expense represented membership dues. ... A third consideration is that, to be deductible, the maintenance costs would have to be incurred by the taxpayer in the course of carrying on the business of operating the club or recreational facility for hire or reward, for the purposes of paragraph 18(1)(l)(i). ... Depending on the facts of a particular situation, there may also be other considerations.  ...

The basic rule under new subsection 84.1(1) is that the maximum amount that can be received by the transferor from the transferee corporation as proceeds in the form of any  non-share consideration and the paid-up capital of the share consideration is restricted to the greater of the paid-up capital of the transferred shares and what might be referred to as the transferor's arm's length actual adjusted cost base of the shares...      New paragraph 84.1(1)(b) treats the purchaser corporation as having paid a dividend to the transferor where the aggregate of the amount of the increase in the legal paid-up capital of its shares arising as a result of the share transfer and the fair market value of the non-share consideration given by it for the transferred shares  exceeds the total of      (a)  the greater of the adjusted cost base, as modified under new paragraph 84.1(2) (a) or (a.1), to the transferor of the transferred shares and the paid-up capital of the transferred shares, and       (b)  the total paid-up capital reductions required by paragraph 84.1(1)(a) to be made by the purchaser corporation.       ...

.- `cumulative eligible capital' of a taxpayer at any time in respect of a business means the amount by which the aggregate of     (i)  1/2 of the aggregate of the eligible capital expenditures in respect of the business made or incurred by the taxpayer before that time, and     (ii) all amounts included by virtue of subsection (1) in computing the taxpayer's income from the business for a taxation year ending prior to that time,      exceeds the aggregate of     (iii)all amounts each of which is an amount in respect of any taxation year of the taxpayer ending before that time, equal to the amount deducted under paragraph 20(1)(b) in computing the taxpayer's income for that year from the business, and     (iv) the aggregate of all amounts each of which is 1/2 of the amount, if any, by which     (A)  an amount that, as a result of a transaction occurring after 1971, became payable to the taxpayer before that time in respect of a business carried on or formerly carried on by him where the consideration given by the taxpayer therefor was such that, if any payment had been made by the taxpayer after 1971 for that consideration, the payment would have been an eligible capital expenditure of the taxpayer in respect of the business,      exceeds     (B)  any outlays and expenses to the extent that they were made or incurred by him for the purpose of giving that consideration; and" It is therefore our view that, by virtue of subparagraph 14(5)(a)(iv) of the Act as it read at that time, the inclusion rate would be 1/2 or 50%, in respect of a sale of goodwill by a corporation, during a fiscal year which commenced February 1, 1988 and ended January 31, 1989. ...

Secondly, you enquired as to whether the application of subsection 69(11) to the situation described herein is precluded because the fair market value of the shares of X Co issued as consideration for the property as equal to the fair market value of the property at the time of the transfer of the property to X Co.  In our view, the application of subsection 69(11) to a transfer is not precluded because the transfer is for fair market value consideration. Subsection 69(11) may apply where the proceeds of disposition of, as opposed to the value of the consideration for, the transferred property is less than the fair market value of such property. ...

As stated in Interpretation Bulletin IT-339R, a PBSP must be in the nature of insurance and must contain the following elements: (i) an undertaking of one person, (ii) to indemnify another person, (iii) for an agreed consideration, (iv) from a loss or liability in respect of an event,:(v,) the happening of which is uncertain. ... The agreed consideration may take the form of cash premiums computed on an actuarial basis. ... In these cases, the consideration given by the employee is considered to be the employee's convenants as found in the collective agreement or contract of service. ...

Notwithstanding the above comments we are in agreement with you that the language of subsection 85(1) does not prevent the use of a right to receive shares as consideration. However, to fulfill the preamble of 85(1) it is our view that some shares must be received as consideration at the time of the disposition. In addition, due to the concerns raised above, it is our administrative position that where a right to receive shares is used as consideration in an 85(1) transfer the value of the right to receive a share of a particular class should not be significantly different from the value of an issued share of that particular class and therefore to that end the right must be exercisable within a reasonable period. ...

The basic rule under new subsection 84.1(1) is that the maximum amount that can be received by the transferor from the transferee corporation as proceeds in the form of any non-share consideration and the paid-up capital of the share consideration is restricted to the greater of the paid-up capital of the transferred shares and what might be referred to as the transferor's arm's length actual adjusted cost base of the shares... New paragraph 84.1(1)(b) treats the purchase corporation as having paid a dividend to the transferor where the aggregate of the amount of the increase in the legal paid-up capital of its shares arising as a result of the share transfer and the fair market value of the non-share consideration given by it for the transferred shares exceeds the total of (a) the greater of the adjusted cost base, as modified under new paragraph 84.1(2)(a) or (a.1), to the transferor of the transferred shares and the paid-up capital of the transferred shares, and (b) the total paid-up capital reductions required by paragraph 84.1(1)(a) to be made by the purchaser corporation. ...

Upon further consideration we are not able to confirm this opinion, but would offer the following alternative comments. ... The borrower, however, is considered to have acquired the shares and the consideration paid to the lender is the obligation of the borrower to deliver identical shares to the lender at some time in the future. While a question of fact, it is arguable that the value of this consideration is equal to the fair market value at that time of the shares acquired. ...