# Capital gains tax hike



## OurBigFatWallet (Jan 20, 2014)

Sounds like there could be a capital gains tax increase in the future. http://business.financialpost.com/p...e-on-the-table-in-the-march-22-federal-budget


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## Eclectic12 (Oct 20, 2010)

I see speculation from industry types ... nothing from the gov't.


Time will tell.


Cherers


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## humble_pie (Jun 7, 2009)

this iconoclastic column by Jamie Golombek has already been discussed in another thread.

there is not a single word from any politician about changes to general capital gain taxation. The column is a CG history & birds-eye summary from estate & tax expert golombek, who may have needed an attention-grabbing topic to write about.

i tend to believe that the liberal government wouldn't spring something like this on the nation without a warning. I tend to believe there would have been a trial balloon. I don't see this golombek column as an appropriate trial balloon, not for something so grave.

under the previous conservative government, various funds employing derivatives that help convert dividends or other income into capital gains were outlawed, were they not? famously, in that exercise, horizons betaPro said its funds would not fall under the new minister of finance directives but would, in fact continue to flourish?

i can see a revenue-hungry government sniffing around the outer edges of capital gains, eliminating certain exotic usages. But i can't see a budget unveiling drastic changes to all capital gains without at least one or 2 prior trial balloons coming directly from politicians' or cabinet ministers' speeches & conferences.


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## none (Jan 15, 2013)

An estate tax is LONG overdue.


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## slacker (Mar 8, 2010)

Removing primary residence capital gain exemption is long over due.


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## Eclectic12 (Oct 20, 2010)

none said:


> An estate tax is LONG overdue.


Maybe there needs to be a definition?

You say that an estate tax is overdue yet I can find a Dummies book that covers the subject.
http://www.dummies.com/how-to/content/the-fundamentals-of-canadian-estate-tax.html



Personally ... I'd rather get rid of the $1 Billion here or there waste first.


Cheers


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## none (Jan 15, 2013)

Waste is never good but for some people's waste is other people's good business. The amount of red tape I have to deal with every day is a colossal waste of funds. Of course, tax payers want all this red tape to provide oversight. Tax payers seem more than happy to blow billions on government red tape to ensure comparatively small amounts of money are not misappropriated. Math doesn't really work but I can understand why it's done that way,


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## james4beach (Nov 15, 2012)

humble_pie said:


> under the previous conservative government, various funds employing derivatives that help convert dividends or other income into capital gains were outlawed, were they not? . . . i can see a revenue-hungry government sniffing around the outer edges of capital gains, eliminating certain exotic usages.


Let's not forget that Conservatives eliminated the Income Trust tax loophole. I don't think this is a liberal vs conservative issue. It's reasonable for any party to eliminate tax loopholes and enforce the "spirit of the law".

Like humble_pie says, I can definitely see rules to crack down on funds using cute derivatives tricks. Horizons has gotten a bit too cute in the last few years. HBB is an example; although this is a very cool fund, it's clearly intended to skirt rules about taxable interest income by transmogrifying interest into capital gains.

And yes I understand that HBB uses a total return swap and it's simply a counterparty agreeing to provide a return etc. But reality is, this fund is truly intended to dodge taxation on interest income.

I hope HBB investors realize they could see the tax rules change around this. They may consider switching to BMO's ZDB, which doesn't use derivatives but rather uses the very legitimate strategy of buying low coupon bonds (something I've done for over 10 years myself).

Other popular ETFs like HXT (with $647 million invested in it) _have also always been in danger of tax reforms_ -- no matter which party was elected.

There's a reason I avoid "exotic" investments.

I really agree with humble_pie here. There are loopholes they can eliminate first; there's no reason for a big drastic change to traditional capital gains. There are enough things to go after which are basically violating the spirit of the law already.


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## Eclectic12 (Oct 20, 2010)

none said:


> Waste is never good but for some people's waste is other people's good business. The amount of red tape I have to deal with every day is a colossal waste of funds.
> 
> Of course, tax payers want all this red tape to provide oversight ...


Must be different tax payers than I know ... I see no need for colossal paperwork to provide oversight.


In any case .... the problem with the $1 billion spent was that there was no oversight and apparently no shame on the part of some consultants/management.


Cheers


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## slacker (Mar 8, 2010)

Don't see anything in the pdf: http://www.budget.gc.ca/2016/docs/plan/budget2016-en.pdf

Seem like fear mongering.


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## Eclectic12 (Oct 20, 2010)

Speculation that some took as special info.


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