The Investment Dealers Association today issued a bulletin concerning the Department of Finance’s proposed technical tax changes that will facilitate loans of income trust units.

The bulletin refers to the Income Tax Technical Amendments Bill released on February 27. It says that the proposed amendments are generally consistent with the draft amendments prepared and submitted to Finance by an ad hoc committee of the IDA last spring.

The bill also contains a new rule designed to prevent income account holders of trust units from receiving the benefit of tax-free distributions from income trusts. The notice says the IDA anticipated that such a rule might be proposed.

The one element that was not expected concerns the retroactive nature of a proposed income adjustment rule. The IDA says that this appears to apply to tax-free amounts received at any time in the past. “This appears to be an unexpected and inappropriate retroactive result,” it says, noting that the IDA intends to bring this fact to Finance’s attention. And, it asks other firms with similar issues to alert Ian Russell, senior vice president Industry Relations and Representation.