News Release Article from  Finance Canada

Government Invites Comments on Proposals to Improve the Integrity of the Federal Tax System by Limiting Access to Graduated Rates for Trusts and Certain Estates

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As announced in Economic Action Plan 2013, the Government is inviting comments on proposed measures to eliminate the tax benefits that arise from taxing trusts and certain estates at graduated rates, as part of ongoing efforts to improve the integrity of the tax system.

The estates of most deceased Canadians are finalized and administered in a timely fashion and without inappropriate tax planning. However, some taxpayers are using estates and trusts to obtain unintended tax advantages. Eliminating the tax benefits of graduated rate taxation for trusts and certain estates would ensure increased fairness and neutrality in the federal income tax system. The proposed measures would also address the potential growth in tax planning involving existing rules and the associated impact on the tax base.

Stakeholders are also invited to comment on proposed measures involving a number of related tax rules.

Comments on the proposals outlined in the attached consultation document can be submitted to the Department of Finance at trusts-fiducies@fin.gc.ca or to the address below. The closing date for comments is December 2, 2013. 

Trust Graduated Rates
Tax Legislation Division
Tax Policy Branch
Department of Finance
140 O’Connor Street
Ottawa, Canada K1A 0G5

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