Canada: Proposed anti-surplus stripping rules dropped | KPMG Global
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Canada: Proposed anti-surplus stripping rules dropped

Canada: Proposed anti-surplus stripping rules dropped

Canada’s government will not move forward with its proposed anti-surplus stripping measures.


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These proposed measures—intended to prevent the conversion of dividends into capital gains—were viewed as introducing uncertainty and complexity into the tax rules, and may have caused unintended tax consequences. Specifically, these consequences could have resulted in, among other things, an increased tax cost on death, an increase in the tax cost on intergenerational transfers of family businesses, and possible negative implications to capital dividend account balances.


Read an October 2017 report prepared by the KPMG member firm in Canada

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