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April 16, 2024

Tax Perspectives

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Please note that these publications may not be up-to-date as taxation matters are subject to frequent changes.

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Supplement 2003

On February 18, 2003, the Minister of Finance released a number of proposed tax changes. We summarize the more significant ones in this commentary.

Tax Shelters

At present, a tax shelter is defined as any property in respect of which it is represented that a potential purchaser will be able to claim, within four years, deductions from taxable income which equal or exceed the net cost of the property. If a property is deemed to be a tax shelter, then there are a number of filing requirements for the promoter of the tax shelter. The Budget has proposed to expand the types of arrangements that would be considered tax shelters.

The main target of this is donation tax credit schemes. These have evolved in a number of ways, including the use of loan arrangements. Perhaps the government now believes that it will be more difficult to challenge donations schemes than was once believed, and that new legislation is the only answer.

The amendments to tax shelter rules apply to gifts, contributions and representations made after February 18, 2003.