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18 Tax Memo 1 (1958)

handle is hein.journals/taxmmo18 and id is 1 raw text is: TAX No. 18 MEMO July, 1958 VIEWS ON DEATH TAX REVISION We present here a digest of opinions expressed in briefs to the Minister of Finance on the 1957 Estate Tax Bill by the fol- lowing bodies: the Trust Companies Association, the Canadian Chamber of Commerce, the Life Underwriters' Asso- ciation, the Canadian Life Insurance Officers' Association, the British Columbia section of the Canadian Bar Association, the Canadian Committee on the Status of Women, the Canadian Bankers' Association, the Vancouver Board of Trade and a com- mittee convened by the Canadian Tax Foundation. Bill 248 died with dissolution of Parliament and the introduction of a new bill, expected to embody some amendments, was awaited as this Memo went to press. If a new bill has been introduced, this Memo should be read in the light of the new bill. While every brief had its own special points of view, and several had recom- mendations not introduced in any other, most of them concentrated their heavy guns on the same targets (many in the present Act), objections being almost unanimously raised to the following: 1. Taxation of foreign real estate. 2. Use of domicile as the basis of liability rather than residence. 3. Inclusion in the estate of the whole of jointly-owned property, instead of only one-half. 4. Taxation of death benefits, pensions and annuities under both estate tax and income tax. 5. Double taxation arising where the proceeds of a life insurance policy on a person deemed to be controlling a corpora- tion are included directly in his estate and also enhance the values of the shares subject to duty. 6. Inclusion of life insurance bought by a spouse or child on the life of the deceased to the extent it cannot be proved the deceased did not contribute directly or indirectly. 7. The confused drafting of the section on exemptions (section 8), and the absence of a clearly worded statement that the basic exemption is in fact $50,000. 8. The denial of tax credit in respect of duty paid to the province of domicile on certain personal property. 9. The conflict between some of the situs rules and common law principles. 10. The placing of too-heavy responsi- bilities on executors, and the lack of pro- tection afforded them. 11. The prohibition of deduction for debts and encumbrances from the estates of persons domiciled outside Canada, and the absence of a notch provision for the tax applicable to such estates. 12. The provision in section 52 that no allowance be made for income tax, which was felt to contradict the principle of fair market value. 13. The valuation provisions generally, and especially the absence of an alternative valuation date. Additional copies of thi Memo may be obtained on reouest. CANADIAN TAX FOUNDATION

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