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In March 2018, amendments were made to the Income Tax Act which affect the tax rules when a charity deregisters. The changes extend the existing deregistration tax rules to all entities that derive exempt income under section CW 42 of the Income Tax Act (previously the rules just applied to registered charities). The changes also clarify that there will be no tax liability if assets are disposed of or transferred to another person for charitable purposes or in accordance with the entity's rules within 1 year of the deregistration.

The amendments apply to charities that are deregistered on or after 6 April 2016. You can find out more information about these changes in Tax Information Bulletin Vol 30 No 5 (June 2018) pp107-108.

Tax Information Bulletin