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Bill to level the tax burden of selling the farm to a family member crosses the finish line

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A personal member’s invoice designed to level the tax burden when selling an included small enterprise to a family member versus selling to a non-family member acquired closing approval from the Senate on Tuesday, clearing the path for Bill C-208 to turn out to be regulation.

The invoice, introduced ahead by Manitoba MP Larry Maguire, addresses the subject of it being extra expensive to switch an included farm to a youngster or grand-child’s company than to a third occasion.

The Senate authorised the invoice on the second-last scheduled day of its spring sitting, as Parliament is about to rise on Wednesday.

“This is tremendously positive news for farm families, who will now will not have to face an additional tax bill, potentially in the hundreds of thousands of dollars. This reduced financial strain on the next generation will directly contribute to a more robust and vibrant Canadian Agriculture sector,” says Mary Robinson, president of the Canadian Federation of Agriculture, in a assertion issued Wednesday.

“We feel this legislation is going to help enable sustainable business and farm succession,” notes Alanna Grey, coverage supervisor for Keystone Agricultural Producers (KAP), in the interview under.

Beforehand, when a farmer or small enterprise proprietor bought shares of their company to a family member’s company, the distinction between the authentic buy value and sale value was thought of a dividend — a measure designed to stop tax avoidance between associated firms. Nonetheless, if the purchaser was a non-family member, the sale was categorized as a capital acquire, and subsequently taxed at a decrease price and eligible for a lifetime capital features exemption. C-208 amends the Revenue Tax Act to enable the sale of shares to a youngster or grand-child to be handled as a capital acquire fairly than a dividend.

“On behalf of the farming families across Canada, we are appreciative that our long-standing recommendation to remove this barrier to smooth family farm transfers has reached a successful conclusion. We thank all the MPs, Senators, and in particular MP Larry Maguire and Senator Diane Griffin, who supported and tirelessly advocated on behalf of Canadian farmers,” provides Robinson.

In the meantime, the future of two different agriculture-related personal member’s payments — Philip Lawrence’s Bill C-206, which might take away the carbon tax from pure fuel and propane used on farms, and John Barlow’s Bill C-205, which might tighten biosecurity laws to handle farm trespassing — are up in the air. The Home of Commons gave its closing approval to C-206 in its final scheduled day of sitting on Wednesday, sending it to the Senate. Senators, in the meantime, have agreed to add not less than two days of sitting to their calendar subsequent week, which means there’s nonetheless a probability Lawrence’s invoice may move earlier than the summer season break. Any laws that has not acquired Royal Assent would die on the Order Paper if the Trudeau authorities decides to name a late summer season or fall election.

Hear to Kelvin Heppner’s dialog with Alanna Grey, coverage supervisor for Keystone Agricultural Producers, discussing the passage of Bill C-208:

Editor’s notice: this story has been up to date with particulars on C-206 and the interview with Alanna Grey.

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