Bill C-69
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SUMMARY |
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These amendments implement the draft technical amendments to the
Income Tax Act and related statutes originally released on April 26,
1995. Also included are a number of other amendments announced in
1995. The great majority of these amendments are of a technical nature.
Those of greater significance are:
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(1) Loss Trading: restricts the transferability of losses between
affiliated persons.
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(2) Bankrupt Individuals: eliminates the double deduction of
personal tax credits in the year of bankruptcy.
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(3) Farmers' Prepaid Expenses: ensures that capital costs cannot
be converted into up-front deductible expenses.
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(4) Changes to Tax Status of Corporations: provides rules which
apply when a corporation becomes or ceases to be exempt from income
tax.
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(5) Tax Shelters: deters aggressive tax shelter promotions by
affecting limited-recourse financing, extending the income base on
which the alternative minimum tax is calculated and modifying the tax
shelter identification rules.
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(6) Disability Benefit Top-ups: ensures that there will be no change
in the income tax treatment to recipients of disability benefits where the
insurance company paying the benefits becomes insolvent and employ
ers take responsibility for continuing the current level of benefits.
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(7) Securities Held by Financial Institutions: implements a
number of modifications to the Income Tax Act provisions governing
the tax treatment of securities held by financial institutions which were
introduced following the 1994 Budget.
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(8) Foreign Property Limits for Deferred Income Plans: ensures
that shares and indebtedness issued by Canadian companies will be
``foreign property'' unless the issuer has a substantial presence in
Canada.
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(9) Adventure in the Nature of Trade: implements the measures
announced by the Minister of Finance on December 20, 1995 according
to which, for income tax purposes, inventory held as an adventure in the
nature of trade must be valued at its historical cost, rather than at the
lower of cost or fair market value, so that accrued losses on such
property will be recognized only on its disposition.
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EXPLANATORY NOTES |
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The Explanatory Notes issued by the Minister of Finance provide a
detailed explanation of these amendments.
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