Date posted: 06/12/2021

Submission on ownership changes

Whether the land sale rules in the Income Tax Act apply to changes to co-ownership, subdivisions of land, and changes of trustees?

The draft Interpretation Statement sets out how the land sale rules in the Income Tax Act 2007 apply when there are ownership changes such as changes in the form of ownership, or changes in co-ownership structures.  It explains when there will be a “disposal” and how the bright-line test applies.  

In our submission, we explain that we agree with the conclusions reached in the draft except in regard to the resetting of the bright-line test.  We have recommended that this issue be referred to policy officials for their consideration.


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