moved for leave to introduce Bill C-208, An Act to amend the Income Tax Act (transfer of small business or family farm or fishing corporation) .
He said: Mr. Speaker, I am pleased to rise today to introduce my private member's bill, an act to amend the Income Tax Act regarding the transfer of small businesses or family farms or fishing corporations. This legislation would level the playing field for small businesses, family farms or fishing corporation owners when transferring their operation to a family member.
Currently, when a person sells his or her business to a family member, the difference between the sale price and the original purchase price is deemed to be a dividend. However, if this business is sold to a non-family member, it is considered a capital gain, which is taxed at a lower rate and allows the seller to use his or her lifetime capital gains exemption.
The bill would allow small businesses, family farms and fishing corporations the same tax rate when selling their operations to their family member as they would selling it to a third party.
I encourage all members to support this bill to promote sustainable small business succession, enhance opportunities for entrepreneurship and end the inequitable taxation of those transferring a small business, farm or fishing corporation to a family member.