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An analysis from Borden Ladner Gervais, Taxand Canada
Canada’s Department of Finance has released draft legislative proposals containing technical amendments to the Income Tax Act, including changes that would expand the scope of “taxable Canadian property” (TCP). The proposals modify the treatment of publicly traded partnership units, broaden the existing look-through rule and reinstate a deeming rule concerning options and interests in property.
Under the proposals, listed partnership units would become subject to the 25% ownership and more-than-50% fair market value tests applicable to listed corporate shares. The broadened look-through rule could also cause non-listed shares and interests to constitute TCP where they indirectly derive more than 50% of their value from underlying TCP assets. A new deeming provision would ensure that options and interests are taken into account when determining TCP status.
Joelle Kabouchi from our Canadian member firm, Borden Ladner Gervais, examines the proposed amendments and their potential implications for taxpayers, investment funds and other structures holding Canadian property.
Read in full here.
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