Federal Budget 2013: How Will It Impact Your Business? - Integrity Measures

As noted, Budget 2013 contains a large number of "integrity" measures, including "tightening" measures and reporting and penalty measures. It also proposes consultations in respect of several other potential integrity measures.

Synthetic Dispositions

Budget 2013 addresses "synthetic disposition arrangements," also commonly known in the market as "forward sales" or subsection 39(4) "transactions", which were used to defer capital gains or to obtain other tax benefits (such as avoiding the stop-loss rules) by allowing a taxpayer to economically dispose of a property while continuing to own it from a legal perspective and for income tax purposes.

Generally, a "synthetic disposition arrangement" will include an arrangement under which the taxpayer eliminates its future risk of loss and opportunity for gain or profit in respect of a property and acquires another property (or a right to acquire another property) for a value which approximates what the taxpayer would