Good morning, everyone.
In terms of the intergenerational transfer, under the Income Tax Act, when individuals sell shares from their own incorporated company to a company with which they have a relationship, for example, if parents sell their shares to one of their children who owns a company, the proceeds of the sale are not considered to be a taxable capital gain. However, it becomes a taxable dividend for the seller. If that person instead sells the shares to an arm's length company, such as a neighbour, the income for the seller retains its status as a capital gain. In this case, they can take advantage of the capital gains deduction, which is available for certain assets, including company shares and farm property.
Family transfers create inequity. You can't do the same thing if you sell your shares to your own children or if you sell them to strangers. Some tax benefits granted to shareholders when they sell their business are not available when it is a real family transfer. That's how it works in agriculture. That is why we ask that the provision not apply to real transfers between members of the same family, between relatives.