Blog: Tax Proposals Concerning Converting Income Into Capital Gains DroppedOctober 19th, 2017
Today, the government announced that it will not be moving ahead with its proposed legislation concerning converting income into capital gains. The draft legislation was originally released in mid-July.
While today’s government briefing did not specifically reference the controversial draft section 246.1, it is believed that this section, as well as the drafted expansion rules to section 84.1 of the Income Tax Act, will not be enacted.
This comes as a relief to most practitioners, as these sections were fraught with issues and unintended consequences.
As a result of the announcement today, it appears that:
- “Pipeline” planning is still a viable method to avoid double taxation in situations where “hard” cost base exists; and
- Capital dividends can be paid out of corporations now with no concerns.
If you are concerned about how this may impact you or your family, we encourage you to contact a member of the Crowe Soberman Tax Group for more details.
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This article was prepared by Crowe Soberman’s Tax Group. If you have any questions relating to this article, we encourage you to contact one of them.
This article has been prepared for the general information of our clients. Specific professional advice should be obtained prior to the implementation of any suggestion contained in this article. Please note that this publication should not be considered a substitute for personalized tax advice related to your particular situation.