Tax Relief For Intergenerational Transfers In Limbo

Bill C-208, a private member's bill aimed at facilitating intergenerational transfers of small businesses and farms, received Royal Assent and became law on June 29, 2021. Just one day later, on June 30, 2021, the Federal Government issued a news release announcing its intention to introduce legislation that will delay application of the Bill until the start of next year, January 1, 2022.

The Bill amends sections 84.1 and 55 of the Income Tax Act  to alleviate the tax disadvantage to owners of small businesses and farms when selling to a family member relative to an arm's length buyer. Despite receiving support from all of the major political parties, officials from the Department of Finance expressed concern that the Bill could allow for unintended and aggressive tax avoidance in some situations, and did not support it. In its news release, the Government confirmed that it is "committed to facilitating genuine intergenerational share transfers, while preventing tax