Safe Income Revisited in Light of the 2015 Amendments to Subsection 55(2).

Subsection 55(2) is a broad specific anti-avoidance rule that prevents taxpayers from converting accrued capital gains into deductible intercorporate dividends. The safe-income exception is an important carve-out from this rule. For decades, the Canada Revenue Agency's administrative positions dealing with the calculation of safe income were rooted in an accounting concept of retained earnings, even though the courts cast doubt on this approach. In 2015, section 55 was amended in several respects, with certain wording changes to the safe-income exception. In this paper, the author argues that these changes do not effect a substantive change to the safe-income exception. The author also explores several other cases and issues that relate to the safe-income exception. [ABSTRACT FROM AUTHOR]