The 2013 federal budget announced the phase-out of the federal LSVCC tax credit by 2017. This spring, Finance held public consultations on the tax rules governing LSVCCs on potential technical changes to the rules related to investment requirements, wind-ups, redemptions, and other rules governing the operation of LSVCCs.
Based on the feedback received during the consultations, Finance is proposing technical transition rules to facilitate the phase-out of federally registered LSVCCs from the LSVCC tax credit program. The Government is proposing to:
- Remove investment requirements and penalties for federally registered LSVCCs that give notice of their intent to exit the program.
- Subject to the approval of the Minister of Finance, allow federally registered LSVCCs to issue new classes of shares that would not be subject to the investment rules applicable to LSVCCs but would not attract the federal LSVCC tax credit.
In addition, Finance said it will accommodate any technical, coordinating changes to provincial legislation meant to facilitate the orderly phase-out of the federal LSVCC tax credit.
For more information, contact your KPMG adviser.
Information is current to December 03, 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