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Ottawa, November 15, 1995
1995-093
Draft amendments on provincially-registered labour-sponsored venture capital corporations
Finance Minister Paul Martin today announced proposed measures affecting labour-sponsored venture capital corporations (LSVCCs) governed by provincial legislation.
At present, individuals who acquire shares issued by LSVCCs are generally entitled to a federal income tax credit, up to the lesser of $1,000 and 20 per cent of the cost of the shares. Some provinces offer an equivalent provincial income tax credit.
LSVCCs can be registered under either federal or provincial legislation. Federal legislation provides for the recovery of the federal income tax credit if shares issued by a federally-registered LSVCC are redeemed within 5 years of issuance. In a number of cases, provincial legislation governing LSVCCs provides for recovery of the provincial income tax credit on acquisition of LSVCC shares.
The amendments released today provide a mechanism for recovering of the federal income tax credit relating to the acquisition of shares issued by provincially-registered LSVCCs. The amount recovered under the new mechanism is generally the same amount that is recovered under the provincial legislation.
Mr. Martin indicated that the proposed amendments are being released in draft form, together with explanatory notes, to provide taxpayers and their advisors an opportunity to consider and comment on the proposed changes in a timely manner. It is intended that these amendments will ultimately be introduced in a bill together with the draft income tax technical amendments issued on April 26, 1995.
The references to "Announcement Date" in the draft legislation and explanatory notes should be read as referring to today's date. For additional copies, contact the distribution centre at (613) 995-2855.
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For further information:
Martine Lemire
Tax Legislation Division
(613) 992-3031
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| Last Updated: 2002-11-26 |
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