Waterloo, ON – In an effort to promote tax fairness and integrity, Baker Tilly Canada has provided a series of recommendations to the Department of Finance regarding intergenerational business transfer rules.
In Budget 2023, the federal government introduced proposed amendments to rules on intergenerational business transfers. In examining the proposed amendments, Baker Tilly Canada’s National Tax Advisory Committee (NTAC) has identified some areas of concern that could cause unintended consequences for taxpayers and unfair taxation results in certain situations.
To address these areas of concern, our NTAC has recently drafted and submitted a letter to the Department of Finance. Drawing on our extensive experience with small businesses – a sector substantially impacted by intergenerational transfers – this letter outlines issues with the proposed amendments, as well as our recommendations for potential solutions.
“In drafting this letter to the federal government, it is our sincere hope we can positively influence the legislation surrounding intergenerational business transfers,” says Mike Hayward, NTAC chair, Baker Tilly Canada. “To be clear, the proposed amendments in Budget 2023 are certainly a step in the right direction. However, based on practical experience as advisors, our concern is that as currently drafted, the amendments may result in unfair outcomes, ultimately contradicting the intentions of Canadian tax policy.”
Echoing this sentiment is Rock Lapalme, associate director, Baker Tilly Canada National Tax Services. “As with any tax legislation, there is always the possibility for inconsistent or unintended outcomes based on interpretation,” notes Lapalme. “Our goal is to provide clear and actionable recommendations to ensure the proposed amendments to the Income Tax Act for intergenerational transfers accomplish what is most fair and reasonable for affected taxpayers.”
The full letter drafted by our NTAC is available here. Baker Tilly Canada tax experts are available to speak with the media regarding the proposed legislation and their recommendations to the Department of Finance.
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