9 October 2015 APFF Roundtable Q. 1, 2015-0595751C6 F - Deductibility of financing fees and 20(1)(e)(v) -- summary under Paragraph 20(1)(e)

The exclusion in s. 20(1)(v)(v) for settlement occurring "as part of a series of borrowings or other transactions and repayments" applies where (i) the debt of the taxpayer is settled by the taxpayer transferring assets to a subsidiary in consideration inter alia for an assumption of the debt (with the taxpayer being released) – or (ii) where the debt is not assumed on the asset transfer and the taxpayer instead uses cash consideration received from the subsidiary (funded out of a borrowing by it) to discharge the debt. In the second situation, CRA considers that the subsidiary borrowing is a borrowing occurring as part of the series. It considers that in the first situation, the debt assumption is also caught, without indicating how the quoted word specifically apply.