Affidavits and valuations for the transfer of a small business, family farm or fishing corporation (Bill C-208)

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Changes to the Income Tax Act in 2021 altered the tax treatment of family transfers of:

If an individual transfers these shares to a corporation controlled by one or more of their children or grandchildren, under the new rules, the transfer is taxed the same as an arm’s length sale.

The individual who transfers the shares must provide the Canada Revenue Agency (CRA) with these documents:

These rules came into effect on June 29, 2021, as a result of Bill C-208.

Requirements for an independent assessment of fair market value

In order for the CRA to accept a valuation as an independent assessment of fair market value, the valuation must be completed by someone who meets these requirements:

The specific contents of the valuation report will depend on the nature of the corporation, its location and its operations. A valuation report typically includes the following information:

A report that meets the Chartered Business Valuation Institute’s standards will meet the CRA’s expectations. However, you are not required to hire a Chartered Business Valuator to complete the valuation.

Requirements for the affidavit

The CRA does not provide a specific form for this affidavit. However, the affidavit must include the following information:

How to submit the valuation report and affidavit

If you are filing your income tax and benefit return by paper, include the affidavit and valuation report with your return. If you are filing your return electronically, keep the affidavit and valuation reporting your records. The CRA may ask for these documents if it reviews your return.

For more information on keeping records, go to Keeping records.

Example of an affidavit

Here is an example of an affidavit for an individual:


Name of the shareholder: _______________________________________

Address: __________________________________________

I solemnly declare that:

  1. I was a shareholder of ______________ (business number (BN):__________), which is either a qualified small business corporation, family farm or fishing corporation within the meaning of subsection 110.6(1) of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp).
  2. My social insurance number (SIN) is ___________________.
  3. On [month] [day], [year], my shares in the above-mentioned entity (the subject shares) were acquired by a corporation, named ______________ (BN: _____________), which is controlled by one or more of my children or grandchildren, who are 18 years of age or older.
  4. The above mentioned children or grandchildren that control said corporation are the following
    (list all children and/or grandchildren):
    1. Name : ____________ (SIN : _____________)
    2. Name : ____________ (SIN : _____________)

And, I have signed :

(Signature of the shareholder)

Sworn before me at


(province, territory, state or country)

On ________________________________________________________________

(Signature of the Commissioner of oaths or notary public)

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