"Restrictive Covenants - The Final Chapter (For Now) - Part 2"

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Originally published in CCH Canadian Ltd, February 7. 2013.

In This Issue:

- Introduction

- Subsection 56.4(7)— The “Realization of Goodwill Amount” and “Disposition of Property” Exceptions

- Areas of Concern

- Special Provisions

- Anti-Avoidance Provisions

- Transitional Provisions

- Conclusion

- Tax Information Exchange Agreement Signed with Liechtenstein

- Recent Cases

- Excerpt from Introduction:

This is the second part of a two-part article discussing proposed legislation dealing with the taxation of restrictive covenants (“RC”). Part 1 was published in Tax Topics No. 2132 on January 15, 2013, and addressed the history, basic inclusion rules, tax treatment to the purchaser, elections to avoid subsection 56.4(2), Ministerial reallocation of consideration, and the arm’s length employee exception. Part II addresses the realization of goodwill and disposition of property exceptions, special provisions, anti-avoidance rules, and transitional provisions.

Please see full Article below for more information.

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