Draft Legislation Summary
20 Jul 2017
On July 18, 2017, the Federal Government released draft legislation to amend the Income Tax Act which would target perceived unfair tax advantages currently obtained by private corporations and their shareholders.
The proposed changes would significantly limit or eliminate income splitting, the multiplication of the lifetime capital gains exemption, the conversion of income into capital gains and the deferral of passive investment income earned through a corporation. The Government is currently seeking consultation from the public on these proposed changes until October 2nd, 2017.
In our view, the proposed changes are counter productive to the tax policies developed over the past few decades that have promoted the growth of privately held small business in Canada and have significantly contributed to Canada’s economic growth. SBLR is currently reviewing the proposed changes and will provide updates as more information becomes available.
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