Student Paper Award
The Canadian Tax Foundation-Fasken Martineau DuMoulin Award for Ontario 2007-8
The Canadian Tax Foundation is pleased to announce that Daniel Lyons is the winner of the Canadian Tax Foundation-Fasken Martineau DuMoulin Award for the best Ontario student paper of 2007-8 dealing with an aspect of Canadian taxation. Mr. Lyons’s paper, “The Death of Income Trusts,” was written as an LLM thesis in the intensive LLM program in tax at the University of Toronto. Mr. Lyons, who graduated from the Faculty of Law at Queen’s University in 2005, received his LLM in 2007. Following is an abstract of Daniel Lyons’s paper.
On October 31, 2006, the Department of Finance announced that income trusts and other flowthrough entities will be taxed as corporations. The author addresses the effect of this announcement on the future of the income trust as an alternative to the corporation. He looks at the structure of income trusts as a business organization and identifies the potential problems inherent in income trusts vis-à-vis the corporate structure.
The author argues that the decision to use income trusts as a business structure was primarily a tax-driven decision, since its flowthrough ability resulted in fewer taxes paid by the income trust. He concludes that the Department of Finance’s decision to impose an entity-level tax on income trusts will lead to a decline in the use and the possible termination of the income trust as an alternative business organization, since it will no longer have a tax advantage over the corporate structure.