MPs on finance committee to discuss timing for changes to small business tax rules

OTTAWA —
A parliamentary committee will hold a rare summer meeting next week about when Ottawa plans to change tax rules on the sale of small businesses between family members.

Conservative MP Larry Maguire’s private member’s bill passed amended the Income Tax Act so business owners could pass on companies to their children or relatives at the same tax rate as if they were selling to a stranger.

Maguire and others who backed the legislation said the change would no longer make it more expensive for someone to sell a family-owned small business to a relative.

The legislation received royal assent in late June just before the House of Commons broke for its summer recess, but didn’t include a specific date for when it would come into force.

As a result, the Finance Department announced the government would bring forward legislation to clarify that the changes would apply starting Jan. 1, 2022.

The House of Commons finance committee will meet on Tuesday to grill department officials about the decision.

This report by The Canadian Press was first published July 16, 2021