The Intergenerational Business Transfer (“IBT”)
regulations came into effect on June 29, 2021, through Bill C-208.
Before this, when parents transferred shares of their corporation
to one owned by their children, it was considered as deemed
dividends rather than capital gains. Bill C-208 aimed to provide an
exception to this rule, enabling parents to benefit from the same
tax advantages as selling to unrelated parties, utilizing the
lifetime capital gains exemption or receiving capital gain
treatment (which is 50% taxable as opposed to fully taxable
dividends) during the transfer.
Budget 2023 Amendments to Bill C-208
Budget 2023 proposes changes to Bill C-208 rules to ensure they
apply only to genuine intergenerational business transfers. A
genuine transfer involves the exchange of shares from a natural
person (the Transferor) to another corporation (the Purchaser
Corporation), subject to specific conditions. The federal
government also suggests expanding the
