Asked by Tanya Woods on Jun 26, 2024
Verified
In 2011,the Canadian government made significant changes to its treatment of income trusts.What was the principal reason for this action?
A) Trusts were becoming too large compared to corporations.
B) Trusts offered unfair tax advantages compared to corporations.
C) The government did not have adequate legislative power to manage the activities of income trusts.
D) Corporations were able to successfully influence government policymakers to bring about these changes.
Income Trusts
Income Trusts are a type of investment trust that holds income-producing assets and distributes the income generated to its shareholders, typically on a monthly or quarterly basis.
Tax Advantages
Financial strategies or aspects of investments that lower the amount of tax payable by taking advantage of beneficial tax policies.
- Recognize the impact of regulatory changes on financial instruments and institutions.
Verified Answer
SA
Samer AlanbakiJul 01, 2024
Final Answer :
B
Explanation :
The principal reason for the Canadian government's changes to its treatment of income trusts in 2011 was that they were offering unfair tax advantages compared to corporations, creating an uneven playing field in the market. These changes aimed to ensure that all businesses were taxed equally and fairly.
Learning Objectives
- Recognize the impact of regulatory changes on financial instruments and institutions.
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