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Canada Consults On 2013 Economic Action Plan

Wednesday, September 18, 2013

On September 13, the Department of Finance released for consultation draft legislative proposals that would implement a number of tax measures from Canada's Economic Action Plan 2013, which was originally introduced in March this year by Finance Minister Jim Flaherty during his 2013 Budget.

The draft legislation contains various measures to be taken within the personal income tax code, including an increase to the Lifetime Capital Gains Exemption to CAD800,000 (USD774,000) and indexing the new limit to inflation.

However, the major elements within the personal income tax changes relate to tax compliance. Examples include: extending the reassessment period for reportable tax avoidance transactions and tax shelters when information returns are not filed properly and on time; ensuring that derivative transactions cannot be used to convert fully taxable ordinary income into capital gains taxed at a lower rate; and ensuring that the tax attributes of trusts cannot be inappropriately transferred among arm's length persons, and responding to the Federal Court of Appeal decision in the Sommerer case to restore the intended tax policy result in relation to non-resident trusts.

In like manner, with regard to international taxation, the reassessment period for taxpayers who have failed to correctly report income from a specified foreign property on their annual income tax return, will be extended; as will the application of Canada's thin capitalization rules to Canadian resident trusts and non-resident entities.

In respect of business taxation, the draft legislation will eliminate the unintended tax benefits of leveraged life insurance arrangements, and enhance corporate anti-loss trading rules to address planning that avoids those rules. It will also expand the eligibility for the accelerated capital cost allowance for clean energy generation equipment to include a broader range of biogas production equipment and equipment used to treat gases from waste.

In addition, the accelerated capital cost allowance for capital assets used in new mines and certain mine expansions will be phased out, and the deduction rate for pre-production mine development expenses will be reduced.

Interested parties are invited to provide comments on the draft legislative proposals by October 15, 2013.

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The Report

Offshore Trusts Guide: Introduction

The History of Offshore Trusts
Development of Professional Competence in the Jurisdictions
What Future for the Trust?
The New Age of Transparency
The Swiss Association of Trust Companies
The Society of Trusts and Estates Practitioners

Offshore Trusts Guide: Jurisdictions

Bahamas

Bahamas: Legal Framework and Formation Rules and Fees
Bahamas: 2006 Private Trust Companies Legislation

Barbados

Barbados: Legal Framework and Formation Rules and Fees
Barbados: Supervisory and Licensing Regime and Fees

Bermuda

Bermuda: Legal Framework and Formation Rules and Fees
Bermuda: Supervisory and Licensing Regime and Fees

British Virgin Islands

British Virgin Islands: Legal Framework and Formation Rules and Fees
British Virgin Islands: Special Trusts Act 2003
British Virgin Islands: The Trustee Act 2003
British Virgin Islands: :Supervisory and Licensing Regime and Fees
British Virgin Islands: New Laws on Private Trust Companies
British Virgin Islands: New Private Trust Company Regulations

Cayman Islands

Cayman Islands: Legal Framework and Formation Rules and Fees
Cayman Islands: Supervisory and Licensing Regime and Fees

Cook Islands

Cook Islands: Legal Framework and Formation Rules and Fees
Cook Islands: Supervisory and Licensing Regime and Fees

Cyprus

Cyprus: Legal Framework and Formation Rules and Fees
Cyprus: Supervision, Licensing and Tax

Gibraltar

Gibraltar: Legal Framework and Formation Rules and Fees
Gibraltar: Legislation, Regulation and Supervision

Guernsey

Guernsey: Legal Framework and Formation Rules and Fees
Guernsey: Trusts Law 2007

Isle of Man

Isle of Man: Legal Framework and Formation Rules and Fees
Isle of Man: Supervisory and Licensing Regime
Isle of Man: Uses Clients and Tax Treatment

Jersey

Jersey: Legal Framework and Formation Rules and Fees
Jersey: Supervisory and Licensing Regime
Jersey: Trusts Amendment Act 2006
Jersey: Foundations

Liechtenstein

Liechtenstein: Legal Framework and Formation Rules and Fees
Liechtenstein: Regulation Supervision and Transparency
Liechtenstein: Characteristics of Liechtenstein Trusts
Liechtenstein: Foundations

Madeira

Madeira: Legal Framework and Formation Rules and Fees

Malta

Malta: Legal Framework and Formation Rules and Fees
Malta: The Trust and Trustees Act 2004

Mauritius

Mauritius: Legal Framework and Formation Rules and Fees
Mauritius: Characteristics of the 2001 Trusts Act
Mauritius: Additional Provisions of the 2001 Trusts Act
Mauritius: Tax Treatment

Monaco

Monaco: Legal Framework and Formation Rules and Fees

Nevis

Nevis: Legal Framework and Formation Rules and Fees

Panama

Panama: Legal Framework and Formation Rules and Fees
Panama: Requirements for Acting as Trust Company in Panama

Seychelles

Seychelles: Legal Framework and Formation Rules and Fees

Turks & Caicos

Turks & Caicos: Legal Framework and Formation Rules and Fees
Turks & Caicos: The Voidable Dispositions Ordinance

Vanuatu

Vanuatu Legal Framework and Formation Rules and Fees




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