Bill C-208 explained in plain English
An Act to amend the Income Tax Act (transfer of small business or family farm or fishing corporation)
Federal Parliament bill summary, status, timeline, sponsor, votes, and official sources.
At a glance
Official Parliament of Canada snapshot for 43rd Parliament, 1st Session. MP vote breakdowns appear when the House of Commons publishes a recorded division export for that bill. Senate and House stage details include official debate/sitting links when LEGISinfo publishes them.
Our plain-language take, written for civic education.
Source: By PoliticalData.ca
Bill C-208 amends the Income Tax Act to facilitate the transfer of shares in qualified small business corporations, family farms, or fishing corporations to a taxpayer's adult child or grandchild, with specific provisions regarding relatedness, anti-avoidance rules, and documentation.
Bill C-208 proposes changes to the Income Tax Act related to the transfer of shares in small business corporations, family farms, or fishing corporations. It aims to ensure that siblings are considered related for tax purposes in certain situations involving these types of shares. Additionally, it introduces conditions under which the transfer of such shares from a taxpayer to their adult child or grandchild would not be subject to a specific anti-avoidance rule. The bill also outlines rules regarding the resale of these shares by the purchasing corporation and requires taxpayers to provide specific documentation to the Minister of National Revenue.
- Amends the Income Tax Act to change the definition of 'related' and 'dealing at arm's length' in specific contexts concerning the transfer of shares.
- Introduces conditions for excluding certain transfers of qualified small business corporation shares or family farm or fishing corporation shares to a taxpayer's child or grandchild from the anti-avoidance rule in section 84.1 of the Income Tax Act.
- Specifies rules and conditions if the corporation that acquires the shares disposes of them within 60 months.
- Introduces a formula to limit a capital gains deduction under certain circumstances related to the value of taxable capital employed in Canada.
- Requires taxpayers to provide an independent assessment of the fair market value of the shares and an affidavit attesting to the disposal.
- Taxpayers who own shares in qualified small business corporations, family farms, or fishing corporations.
- Children and grandchildren of taxpayers who acquire shares in these types of corporations.
- Corporations that purchase shares from taxpayers in these specific scenarios.
- The Minister of National Revenue.
- Taxpayers must provide an independent assessment of the fair market value of the shares.
- Taxpayers must provide an affidavit signed by themselves and a third party attesting to the disposal of the shares.
- Purchasing corporations must not dispose of the acquired shares within 60 months for the arm's length condition to apply.
- Taxpayers may have a limited capital gains deduction under specific circumstances as defined by a formula in the bill.
- The 60-month period for not reselling shares begins when the taxpayer disposes of the shares to the purchaser corporation.
- The bill specifies rules for taxation in the current and preceding taxation years related to capital employed in Canada.
- If the purchaser corporation disposes of the shares within 60 months (and not due to death), the arm's length exception in paragraph 84.1(2)(e) is deemed never to have applied.
- The taxpayer is then deemed to have disposed of the shares to the ultimate acquirer.
- The 60-month period is recalculated from the original disposition by the taxpayer.
- The bill does not specify what constitutes a 'qualified small business corporation share' or a 'family farm or fishing corporation' beyond referencing subsection 110.6(1) of the Income Tax Act.
- The precise application of the formula for limiting the capital gains deduction, particularly concerning the definition of 'taxable capital employed in Canada' and corporate associations, may require further clarification.
- The bill does not specify if there are any exceptions to the 60-month resale rule other than death.
Changes the conditions under which siblings are deemed to be dealing at arm's length and not related, specifically when a dividend is part of a transaction involving shares of a qualified small business corporation or a family farm or fishing corporation.
Source: Section 1 of the bill, which replaces subparagraph 55(5)(e)(i) of the Income Tax Act.
Amends section 84.1 to add a condition where a taxpayer and a purchasing corporation are deemed to be dealing at arm's length if the purchaser corporation is controlled by the taxpayer's adult child or grandchild and does not resell the shares within 60 months.
Source: Section 2(1) of the bill, which amends subsection 84.1(2) of the Income Tax Act.
Establishes rules for paragraph 84.1(2)(e) concerning the resale of shares by the purchaser corporation within 60 months, the application of the anti-avoidance rule, and the calculation of a taxpayer's capital gains deduction.
Source: Section 2(2) of the bill, which adds subsection 84.1(2.3) to the Income Tax Act.
Generated using AI from official bill text. Not legal advice. It is written by PoliticalData.ca for civic education, automatically checked and spot-reviewed before publishing.
Official textParliamentary Process
Bill C-208 has not yet had its first reading in the Senate, and is currently at second reading in the House of Commons, with a similar previous bill having been defeated.
This artifact describes the procedural stage of Bill C-208 in the Senate. It indicates that the bill has not yet reached its 'First reading' stage in the Senate, and its current status is 'At second reading in the House of Commons'. The latest recorded activity for the bill was its placement in the Order of Precedence in the House of Commons on February 27, 2020. The 'First reading' in the Senate is noted as Wednesday, February 19, 2020, but the stage state is 'Not reached'. The artifact also mentions a similar bill, C-274, from a previous Parliament which was defeated after its first reading in the House of Commons.
Bill C-208 has not yet reached the Senate Second Reading stage, while it is currently at second reading in the House of Commons, and a similar bill from a previous Parliament was defeated.
The artifact indicates that Bill C-208 has not yet reached the Senate Second Reading stage. The bill is currently at the second reading stage in the House of Commons. It also notes that a similar bill, C-274, was introduced in a previous Parliament as a Private Member's Bill but was defeated after its first reading in the House of Commons.
Bill C-208 has not yet reached Third Reading in the Senate, and its current status is Second Reading in the House of Commons, with a similar previous bill having been defeated.
This artifact indicates that Bill C-208, which aims to amend the Income Tax Act concerning the transfer of small business or family farm or fishing corporations, has not yet reached the Third Reading stage in the Senate. The bill's current status is at the Second Reading stage in the House of Commons. The latest procedural activity noted was its placement in the Order of Precedence in the House of Commons on February 27, 2020. A similar bill, C-274, was introduced in a previous Parliament but was defeated after its First Reading in the House of Commons.
Bill C-208 was introduced at first reading in the House of Commons on February 19, 2020, and later placed in the Order of Precedence, with a similar bill from a previous Parliament having been defeated at the first reading stage.
On February 19, 2020, Bill C-208 reached its first reading in the House of Commons. This is a procedural step where a bill is formally introduced. Later, on February 27, 2020, it was placed in the Order of Precedence, which is a list of items awaiting debate or action. The provided text also notes that a similar bill, C-274, was introduced in a previous Parliament but was ultimately defeated after its first reading. The bill's current status is 'At second reading in the House of Commons', which means it has progressed beyond the first reading stage.
This House of Commons sitting record from February 19, 2020, details procedural activities including the introduction of Bill C-208, a debate on government orders, and adjournment proceedings.
This artifact is a record of a sitting of the House of Commons on February 19, 2020. During this sitting, several procedural activities occurred, including "Statements by Members," "Oral Questions," "Government Orders," "Routine Proceedings," and "Adjournment Proceedings." Under "Routine Proceedings," there were motions to introduce several private member's bills, including Bill C-208, an Act to amend the Income Tax Act concerning the transfer of small business or family farm or fishing corporations. The motion to introduce Bill C-208 was deemed adopted, and the bill was read the first time and ordered to be printed. Other proceedings included discussions and votes on various government and opposition business. The sitting concluded with adjournment proceedings.
Bill C-208 was placed in the order of business for second reading in the House of Commons on February 27, 2020, but no procedural activity occurred on that date, and a similar bill from a previous Parliament was defeated.
The artifact indicates that Bill C-208 was placed in the Order of Precedence on February 27, 2020, at the House of Commons Second Reading stage. However, the 'Stage state' is noted as 'No activity' for this specific artifact date. The information also references a similar bill, C-274, from a previous Parliament, which was defeated after its first reading.
Bill C-208, concerning the transfer of small business or family farm or fishing corporations, has been placed in the Order of Precedence in the House of Commons and is awaiting consideration in committee, with a similar bill having been defeated in a previous Parliament.
This artifact describes the status of Bill C-208, which aims to amend the Income Tax Act concerning the transfer of small business or family farm or fishing corporations. The bill has reached the stage of 'House of Commons Consideration in committee', but this stage has not yet been reached. The latest activity recorded was the bill being placed in the Order of Precedence on February 27, 2020. The bill had its first reading on February 19, 2020. The artifact also notes that a similar bill, C-274, was introduced in a previous Parliament but was defeated after its first reading.
Bill C-208, concerning the transfer of small business or family farm or fishing corporations, has not yet reached the Report stage in the House of Commons, with its latest activity being placed in the Order of Precedence in February 2020.
This artifact describes the progress of Bill C-208, An Act to amend the Income Tax Act (transfer of small business or family farm or fishing corporation). The bill is currently at the 'Report stage' in the House of Commons, but this stage has not yet been reached. The latest recorded activity was the bill being placed in the Order of Precedence on February 27, 2020. The bill had its first reading on February 19, 2020. The artifact also notes a similar bill, C-274, from a previous Parliament which was defeated after its first reading.
Bill C-208 has not yet reached the Third Reading stage in the House of Commons, and a similar previous bill was defeated.
This artifact indicates that Bill C-208, concerning the transfer of small business or family farm or fishing corporations, has not yet reached the Third Reading stage in the House of Commons. The bill's current status is "At second reading in the House of Commons," and its latest recorded activity was being placed in the Order of Precedence on February 27, 2020. A similar bill, C-274, was introduced in a previous Parliament but was defeated after its first reading.
Debate and sitting links point to official parliamentary sources when LEGISinfo publishes them. Any plain-language discussion summaries should be generated from those official texts and reviewed before public display.
Vote Summary
This bill is still active. We only show vote counts after the legislature publishes a recorded division.
No published representative vote breakdown
This bill is still moving through the process. When a recorded division is published, representative positions can be listed here.
Official sources
Status, sponsor, votes, and timeline on this page are drawn from these official legislative sources and public records. Each summary above is attributed to its own source.
How this data is sourced