Flurry of tax proposals affects flow-through shares

"Investors in flow-through shares are going to need an expanded road map to find their way through a growing maze of tax rules affecting such shares. At the end of 1985, no fewer than three new sets of important tax amendments were tabled which could have a significant effect on flow-through share issues. This proposed legislation is discussed this month in Tax Notes.IntroductionIn a flurry of legislative activity at the end of 1985, the federal government tabled legislation which includes the introduction of new rules which will have a notable effect on investors in flow-through shares and on companies that issue such shares.First, on November 26, 1985, Bill C-84, the legislation to implement most of the changes announced in the May budget, was introduced in Parliament. This legislation includes the rules for the $500,000 capital gains exemption, a matter of considerable interest to flow through share investors.Next, on December 2, 1985, the government tabled a Notice of Ways and Means Motion which would extend the time horizon for spending flow-through share funds to include the 60-day period following the calendar year. But all news was not good news. On December 4 the government released its proposals for a minimum personal income tax, which would include rules that would catch an investor's CEE expenses and capital gains."