Congratulations to Tax lawyer Joan Jung and her co-author Ken Griffin (PwC Canada LLP), whose paper "Surplus Stripping and Intergenerational Transfers of Business" was published by the Canadian Tax Foundation on TaxFind. The paper was originally written for and presented at the 2019 Canadian Tax Foundation Annual Conference.
In the paper, the authors explore the history and purpose of
section 84.1 and consider possible statutory approaches to
facilitating what may be regarded as a "genuine" transfer
rather than a surplus strip. So-called hallmark approaches,
including those used by the United States and Quebec, are examined
in particular. The authors propose an alternative approach, using
the current concepts of "small business corporation" and
"affiliated persons" to provide parameters that could
exempt certain non-arm's-length transfers from the section 84.1
rules and still provide a reasonable safeguard against potential
abuse. It is available on TaxFind (subscription only). Visit
TaxFind here:
https://www.ctf.ca/ctfweb/EN/TF_Online/EN/TaxFind/TF_Online.aspx?hkey=9da5b038-4df1-46f2-b810-68414afcdeab
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