The bill includes the following 2013 federal budget measures:
- Increasing and indexing the Lifetime Capital Gains Exemption
- Expanding accelerated capital cost allowance to further encourage investments in clean energy generation
- Ensuring that synthetic disposition transactions are taxed as actual dispositions
- Providing that income from character conversion transactions is taxed appropriately
- Ensuring that the tax attributes of trusts cannot be inappropriately transferred among arm's length persons
- Amending the rules that apply to non-resident trusts
- Eliminating unintended tax benefits from two types of leveraged life insurance arrangements
- Restricting corporate loss trading among arm's-length persons
The above measures were released as draft legislation on September 13, 2013.
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.
Credit union tax hike glitch fixed
Bill C-4 also corrects an unintended technical glitch in the credit union legislation that was originally found in the 2013 Federal Budget Bill #1 (Bill C-60). Although the 2013 federal budget proposed to phase-out the preferential tax rate for credit unions over five years, the enacted legislation in Bill C-60 did not technically work that way.
The five year phase-out of the credit union deduction in Bill C-4 should now work as the 2013 federal budget originally intended. Specifically, the 11% credit union tax rate now increases to a 15% general corporate rate over five years.
Since the legislative fix is considered substantively enacted for accounting purposes as of October 22, 2013 it can be reflected for financial statement purposes.
For more information, contact your KPMG adviser.
Information is current to October 29, 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