Canada - English

Finance Tables 2013 Federal Budget Bill #2 and Other Catch-Up Measures 

Canadian Tax Adviser

 

October 22, 2013

 

Finance tabled a Notice of Ways and Means Motion (197 pages of draft legislation and 166 pages of explanatory notes) on October 18, 2013 to implement remaining tax measures from the 2013 federal budget, as well as "certain previously announced tax measures". According to Finance's press release, the Notice of Ways and Means Motion 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.

 

Previously announced tax measures
The other "previously announced tax measures" in the Notice of Ways and Means Motion include:

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.

 

Excluded measures
The following proposed measures, among others, appear to still be outstanding:

 

  • 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.

 

Also excluded are draft proposals for which a consultation period is still open (e.g., life insurance exemption test, treaty shopping prevention, and testamentary trusts' graduated tax rates).

 

For more information, contact your KPMG adviser.

 

 

 

 

 

 

Information is current to October 22, 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

Publications

Canadian companies may be interested in these recent publications: