Published | Category : Income tax - businesses
Easing of the Tax Provisions Applicable to the Transfer of Family Businesses
The provisions of the Taxation Act prohibit an individual from obtaining a capital gains exemption on the disposition of qualified shares to a corporation with which the individual is not dealing at arm's length.
The provisions in question will be amended with respect to sellers who receive consideration as full or partial payment.
Moreover, the Act will also be amended so that the provisions will not apply where the seller claims the capital gains exemption in respect of a capital gain realized on the disposition of qualified shares in the primary (agriculture and fishing) and manufacturing sectors to a corporation with which the seller is not dealing at arm's length. The shares must, however, be disposed of in conjunction with the transfer of a qualified family business.
The amendments will apply with respect to dispositions of shares that take place after December 31, 2016.
For more information, see pages A.113 to A. 117 of the document entitled Additional Information 2015-2016 (PDF – 1.96 MB), published by the Ministère des Finances.