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ARTICLE · 06 APRIL 2013

Budget 2013: Changes To Personal Income Tax Rules

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Budget 2013 proposes a number of changes to the provisions of the Income Tax Act (Canada) (the "Tax Act") governing the taxation of individuals, including (i) an increase in the lifetime capital gains exemption and the indexing of same to inflation, (ii) a reduction in the dividend tax credit rate for "non-eligible" dividends, (iii) an extension of the reassessment period for participants in certain tax shelter arrangements and tax avoidance transactions, and (iv) measures enabling the Canada Re

CanadaTax
Michael Friedman
Michael Friedman
Peter Botz
Peter Botz
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Budget 2013 proposes a number of changes to the provisions of the Income Tax Act (Canada) (the "Tax Act") governing the taxation of individuals, including (i) an increase in the lifetime capital gains exemption and the indexing of same to inflation, (ii) a reduction in the dividend tax credit rate for "non-eligible" dividends, (iii) an extension of the reassessment period for participants in certain tax shelter arrangements and tax avoidance transactions, and (iv) measures enabling the Canada Revenue Agency (the "CRA") to collect 50% of disputed taxes arising from charitable donation tax shelters.

Increase in the lifetime capital gains exemption

The Tax Act currently provides for a lifetime capital gains exemption (the "Lifetime Exemption") on gains of up to $750,000 realized by an individual who disposes of "qualified small business corporation" shares (i.e., shares of a "small business corporation" which satisfy a series of activity, ownership and asset tests),

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