Bill C-4 includes the following 2013 federal budget measures to:
- Increase and index the Lifetime Capital Gains Exemption
- Expand the accelerated capital cost allowance to further encourage investments in clean energy generation
- Ensure that synthetic disposition transactions are taxed as actual dispositions
- Tax income from character conversion transactions
- Provide limitations on the transfer of the tax attributes of trusts between arm's length persons
- Amend the rules that apply to non-resident trusts
- Eliminate "unintended tax benefits" from two types of leveraged life insurance arrangements
- Restrict corporate loss trading among arm's-length persons
The bill also includes certain previously announced tax measures, including:
- December 21, 2012 technical amendments - RRSP anti-avoidance rules, section 88 bump denial rules, and section 55 divisive reorganization rules, as well as changes to Alternative Minimum Tax
- July 25, 2012 draft legislation - SIFT stapled securities and withholding tax on trusts emigrating to Canada.
What's not in the bill
There are still major pieces of proposed tax amendments that remain outstanding and are not yet law. For example, the bill does not include legislation related to:
- Foreign affiliate, non-resident corporations without share capital, foreign currency election, and residence of international shipping corporation rules, among others, released as draft legislation on July 12, 2013
- Foreign affiliate dumping rules and relieving amendments released as draft legislation on August 16, 2013
- Base erosion rules released as draft legislation on November 27, 2012
- Exemption test and other life insurance policyholder taxation rule amendments released as draft legislation on August 23, 2013.
For more information, contact your KPMG adviser.
Information is current to December 12, 2013. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500