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These amendments to the Income Tax Act implement measures
released for public consultation on August 30, 1993. Most of the
amendments are of a technical nature and many had been announced
earlier. These were:
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1. Draft amendments on qualified investments for RRSPs, released
on February 4, 1993.
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2. Draft legislation relating to the capital tax on life insurance
companies, released on February 19, 1993.
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3. Draft legislation relating to the simplification of the income tax
treatment of automobile operating cost benefits, released on March 30,
1993.
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4. Notice of Ways and Means Motion relating to cross-border
purchase butterfly transactions, tabled on May 4, 1993.
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5. Changes to withholding tax rules on securities lending
arrangements, released on May 28, 1993.
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Other measures of greater significance are:
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6. RRSPs on death: provides that after an individual dies, the
individual's legal representative can pay an RRSP premium on behalf
of the individual for the benefit of a surviving spouse up to 60 days after
the end of the year of death.
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7. Loss of source of income: provides a deduction for interest on
funds borrowed by a taxpayer to earn business income or certain types
of investment income where the interest would otherwise be rendered
non-deductible because the business assets or investment property
financed by the borrowing have been disposed of at a loss or have
become valueless.
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8. Changes in residence: rules that apply to all individuals and
corporations moving into or leaving Canada. The overall result is to
ensure that Canada recognizes only income, or losses, either earned in
Canada or attributable to the time the taxpayer resided in Canada.
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9. SR&ED expenditures: this measure was introduced in the
February 22, 1994 budget and requires taxpayers to identify scientific
research and experimental development expenditures as such in order
to qualify for the investment tax credit.
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