On July 19, 2021, the Department of Finance issued a press release clarifying their previous release of July 2, 2021. It notes:
The changes contained in the legislation now apply in law (as opposed to January 1, 2022 as indicated in the prior release).
The government intends to amend the legislation to safeguard against any unintended tax avoidance loopholes, such as the ability to “surplus strip”.
The draft legislative amendments would be brought forward for consultation.
The amendments would address items such as:
the requirement to transfer legal and factual control of the corporation carrying on the business from the parent to their child or grandchild;
the level of ownership in the corporation carrying on the business that the parent can maintain for a reasonable time after the transfer;
the requirements and timeline for the parent to transition their involvement in the business to the next generation; and
the level of involvement of the child or grandchild in the business after the transfer.
Final legislative proposals which would apply as of the later of either November 1, 2021, or the date of publication of the final draft legislation.