Arm's Length Transaction


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Related to Arm's Length Transaction: Arm's length price

Arm's Length Transaction

A transaction in which the buyer and the seller have no significant, prior relationship. In an arm's length transaction, neither party has an incentive to act against his/her own interest. That is, the seller seeks to make the price as high as he/she can, and likewise the buyer seeks to make it as low as he/she can. The negotiations for an arm's length transaction result in the arm's length price, which is almost always close to the market value of the asset being sold. The term is often used in real estate transactions because family members often sell property to each other at something other than the arm's length price.
References in periodicals archive ?
Considerable concern has been expressed about certain aspects of the new rules, including the authority accorded Revenue Canada to redetermine the nature of transactions out of step with typical arm's length transactions.
003, publishes a specific definition of an arm's length transaction.
in an arm's length transaction, the commercial property located at 1010 Ste-Catherine Street East, in Montreal.
The transaction is an arm's length transaction as the directors and officers of Binscarth currently have no interest in DoveCorp.
The transaction should not be considered an arm's length transaction.
The Company's acquisition of IDC is an arm's length transaction.
The Qualifying Transaction is an arm's length transaction.