Words and Phrases - "disbursement"

The taxpayer, wished to sell land to the City of Calgary in consideration for two annual instalments in order to defer a portion of the gain to its second taxation year, but was informed that the City was precluded by statute from purchasing land over a period of years. As a result: the taxpayer sold the land to a trust company for the same purchase price, but payable in two instalments with the second instalment bearing interest at 7.5% per annum, and with a clause in the purchase agreement that the trust company could elect within 60 days of the date of the agreement of sale to void the agreement; and the trust company sold the land to the City for the same purchase price, paid in cash. Title was transferred directly from the taxpayer to the City.

In finding that the transactions did not entail a conferral of a benefit by the trust company on the taxpayer, Cattanach J. noted (at p. 6018) that the taxpayer acknowledged its obligation to pay income tax on the profit realized by it on the sale of the land when the deferred payments were received by it.