Cases
Armour Group Limited v. Canada, 2018 FCA 134
A bare trustee (“FSL”) for the taxpayer (an investment and real estate company) had received a ground lease of property in downtown Halifax...
Imperial Tobacco Canada Limited v. Canada, 2012 DTC 5003 [at 6508], 2011 FCA 308
The taxpayer's predecessor ("Imasco") agreed with the owner of 42.5% of its common shares ("BAT") that it would encourage all the holders of...
The Queen v. Kaiser Petroleum Ltd., 90 DTC 6603, [1990] 2 CTC 439 (FCA)
In an agreement between the U.S. parent of the taxpayer and Kaiser Resources Ltd. for the sale by the U.S. parent of shares of the taxpayer to...
Angostura International Ltd. v. The Queen, 85 DTC 5384, [1985] 2 CTC 170 (FCTD)
An amount of $500,000 paid in order to secure the surrender by the payee distributor of its rights to distribute aromatic bitters and alcoholic...
Bomag (Canada) Ltd. v. The Queen, 84 DTC 6363, [1984] CTC 378 (FCA)
The vendor of the assets of an earth compaction machine manufacturing business shortly after executing the asset sales agreement entered into a...
Canada Forgings Ltd. v. The Queen, 83 DTC 5110, [1983] CTC 94 (FCTD)
Large payments, made to the president and vice-president of Canada Forgings in return for the surrender by them of their employee stock options,...
Sunshine Mining Co. v. R., 75 DTC 5126, [1975] C.T.C. 223 (FCTD)
Damages (including interest) paid by the taxpayer as a consequence of its failure to perform exploration work under an agreement to earn one-half...
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| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Income-Producing Purpose | 33 |
Automatic Toll Systems (Canada) Ltd. v. MNR, 74 DTC 6060, [1974] CTC 30 (FCTD)
The taxpayer agreed to pay a company owned by an individual ("Bastien") with political connections a fee equal to 10% of all sales or rentals...
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|---|---|---|
| Tax Topics - General Concepts - Substance | 80 |
Dymo of Canada Ltd. v. MNR, 73 DTC 5171, [1973] CTC 205 (FCTD)
When the taxpayer decided to itself distribute one of its product lines it agreed with the sole distributor of the line (which did not have an...
Johnston Testers Ltd. v. MNR, 65 DTC 5069, [1965] CTC 116 (Ex Ct)
The taxpayer, an oil well testing company, paid $146,000 to the holders of patents which it had been licensed to use for an extended period in...
Bedford Overseas Freighters v. MNR, 59 DTC 1008, [1959] CTC 58, [1959] CTC 57 (Ex. Ct.)
decided concurrently with Halifax Overseas Freighters Ltd. v. MNR, 59 DTC 1013 (Ex. Ct.) and Falise Steamship Co. Ltd. v. MNR, 59 DTC 1016 (Ex....
British Columbia Electric Railway Company Limited v. The Minister of National Revenue, 58 DTC 1022, [1958] CTC 21, [1958] S.C.R. 133, [1958] CTC 20
Payments totalling $220,000 which the taxpayer made to various municipalities in order to obtain their acquiescence to its application to...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Income-Producing Purpose | 110 |
See Also
The Armour Group Limited v. The Queen, 2017 TCC 65, aff'd 2018 FCA 134
A bare trustee (“FSL”) for the taxpayer (an investment and real estate company) had received a ground lease of property in downtown Halifax...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 54 - Adjusted Cost Base | payment made to ground lessor was capital expenditure for a capital asset (the ground leasehold interest) | 327 |
Shoppers Drug Mart Limited v. The Queen, 2008 DTC 2043, 2007 TCC 636
Various employees of the taxpayer had been granted stock options by the taxpayer's parent ("Imasco"), a public corporation, and the option plan...
Dubois c. La Reine, 2007 DTC 1534, 2007 TCC 461 (Informal Procedure)
In finding that legal fees incurred by the taxpayer as a result of her cancellation of an agreement to purchase a building were capital...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Start-Up and Liquidation Costs | 100 | |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Disposition | legal expenses incurred re cancellation of purchase may be loss from disposition | 90 |
| Tax Topics - Income Tax Act - Section 4 - Subsection 4(1) - Paragraph 4(1)(a) | 152 | |
| Tax Topics - Income Tax Act - Section 40 - Subsection 40(1) - Paragraph 40(1)(a) - Subparagraph 40(1)(a)(i) | disposition of right to acquire building | 122 |
Vodafone Cellular Ltd. v. Shaw, [1997] BTC 247 (C.A.)
The taxpayer made a lump-sum payment to terminate an agreement under which an American company agreed to supply the taxpayer from time to time at...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Purpose/Intention | 62 | |
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Income-Producing Purpose | deductible lump-sum cancellation of profit participation payment | 190 |
Baker Lovick Ltd. v. MNR, 91 DTC 1041, [1991] 2 CTC 2345 (TCC)
The taxpayer, in order to sublet the portion of its Calgary office space which was excess to its needs, paid an inducement payment of $157,806 to...
J. Gadsden & Co. Ltd. v. C.I.R. (N.Z.) (1964), 14 A.T.D. 18 (N.Z.S.C.)
The taxpayer, which had agreed to pay a royalty to an American company in consideration for the provision by the American company of technical...
A. Leon Company Limited v. MNR, 61 DTC 517 (TAB)
Payments made by a dealer in furniture and home furnishings to landlords for the termination of the leases for two of its unprofitable stores were...
Shuchat v. MNR, 61 DTC 119 (TAB)
The taxpayer paid $10,000 to a tenant for the agreement of the tenant to vacate the premises. As a result the taxpayer was able to lease the...
Ablan Leon Limited v. MNR, 61 DTC 519 (TAB)
Among the liabilities assumed by the taxpayer on taking over the business of a predecessor was the obligation to continue making lease termination...
West African Drug Co., Ltd. v. Lilley (1947), 29 TC 140 (K.B.D.)
The taxpayer was obligated under the terms of its lease of premises that had been used by it for a pharmacy in Accra to continue paying the rent...
W. Nevill & Co. Ltd. v. Federal Commissioner of Taxation (1937), 4 A.T.D. 187 (HC)
In finding that instalments of a lump sum payment made by the taxpayer to a joint managing director in consideration of his cancelling his...
Anglo-Persian Oil Co., Ltd. v. Dale (1931), 16 TC 253 (C.A.)
The taxpayer, which had entered into a long-term agreement with another company for it to act as the taxpayer's agent in managing its business in...
Mallett v. Staveley Coal and Iron Co., Ltd. (1928), 13 TC 772 (C.A.)
In finding that lump sums paid by a colliery company in order to secure a reduction in the scope of (in one case) or the cancellation (in the...
B.W. Noble, Ltd. v. Mitchell (1927), 11 TC 372 (CA)
Although the taxpayer, which was an insurance and reinsurance broker, had cause to dismiss one of its directors, and to require him to transfer...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Income-Producing Purpose | 114 |
Royal Insurance Co. v. Watson (1896), 3 TC 500 (HL)
The agreement for the sale of the business of The Queen Insurance Company ("Queen") to the taxpayer provided that the taxpayer was to retain the...
Administrative Policy
31 March 2011 Internal T.I. 2011-0291701I7
Payments made by a public company which was the target of a takeover bid in paying employees to surrender vested stock options were capital...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 14 - Subsection 14(5) - Eligible Capital Expenditure | 95 | |
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Legal and other Professional Fees | acceptance of BJ Services; merger a capital transaction | 291 |
12 July 2011 Internal T.I. 2010-0366321I7 - Tax treatment of break fees received
In indicating that a break fee arguably should be included in income under the surrogatum principle (in addition to being so included on...
27 January 2004 Internal T.I. 2003-0044761I7 - Deductibility of Contract Termination Payments
A REIT (a majority of whose board was independent trustees), which previously had entered into an advisory agreement with the companies of two of...
12 June 2003 Internal T.I. 2003-001100
As a result of selling a business the taxpayer was no longer able to fulfill its obligations under a supply contract and negotiated a termination...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 14 - Subsection 14(5) - Eligible Capital Expenditure | 80 | |
| Tax Topics - Income Tax Act - Section 9 - Compensation Payments | 47 |
17 April 2002 Internal T.I. 2002-0122157 F - ANNULATION D'OPTION D'ACHAT D'ACTION
The Directorate maintained its position in 2001-0098827 F that, consistent with Kaiser Petroleum and Canada Forgings, that cash amounts paid by a...
11 December 2001 Internal T.I. 2001-0098827 F - ANNULATION D'UN REGIME D'OPTION
After Aco had acquired control of Bco, Bco was privatized so that Aco acquired all the remining shares. The stock option plan for Bco was amended...
14 November 2000 External T.I. 2000-0048355 - STOCK OPTIONS EMPLOYER CASHOUT RIGHT
The position of the Agency that an employer may deduct a payment it elects to make instead of issuing shares pursuant to the exercise by an...
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| Tax Topics - Income Tax Act - Section 7 - Subsection 7(3) - Paragraph 7(3)(b) | employer option to pay cash | 149 |
9 November 2000 External T.I. 2000-0048205 - STOCK OPTIONS CASHOUT OPTION
S.7(3) would apply to deny the deduction to a Canadian corporation of the cost of acquiring shares of its U.S. parent for sale to its employees...
30 November 1995 Ruling 9618953 - STOCK OPTION ACCELERATION AND PAYOUT
At the time a corporate employer enters into negotiation for the sale of all its assets to an arm's length purchaser, it amends its employee stock...
IT-467R2 "Damages, Settlements and Similar Payments"
Deductibility for termination payments that commute deductible expenses
16. Where amounts originally payable under a contract would have been...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Expenditure v. Expense - Damages | 26 | |
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Damages | deductibility assessed at time of conduct | 59 |
89 C.M.TC - "Leasing Costs"
general discussion; an amount paid in the ordinary course of a property rental business to a non-anchor tenant is on income account; special...
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| Tax Topics - Income Tax Act - Section 40 - Subsection 40(1) - Paragraph 40(1)(a) - Subparagraph 40(1)(a)(i) | 36 |
IT-359R2 "Premiums and Other Amounts with Respect to Leases " 20 December 1983
15. An amount a tenant pays to cancel a lease or sublease is deductible by the tenant in computing income from a business or property provided...
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| Tax Topics - Income Tax Act - Section 9 - Compensation Payments | 179 | |
| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Leases and Licences | 72 |
Articles
Krasa, "The deductibility of fines, penalties, damages, and contract termination payments", November - December 1990 Canadian Tax Journal, p. 1399.
Dunbar, "Employers may be Precluded from Deducting Severance Payments", Taxation of Executive Compensation and Retirement, December 1989/January 1990
Discussion of deductibility of golden parachutes.