Halloween Massacre

AAA

DEFINITION of 'Halloween Massacre'

Canada's decision to tax all income trusts domiciled in Canada. In October 2006, Canada's minister of finance, Jim Flaherty, announced that all income trusts would be taxed in a similar manner as corporations at a rate over 30% on taxable income, causing unit holders' values to decrease dramatically virtually overnight.

INVESTOPEDIA EXPLAINS 'Halloween Massacre'

Income trusts, which were permitted to make distributions to unit holders on a pretax basis under old Canadian income tax laws, were a popular investment vehicle in the early 2000s, especially in Canada. The Canadian energy sector was hardest hit by the change, and suffered an estimated loss of about $35 billion to investors, giving rise to the term "massacre".

This change in the Canadian tax law, which was largely debated after the fact, was made to remedy a perceived loss of tax revenue.

RELATED TERMS
  1. Canada Revenue Agency - CRA

    A federal agency that collects taxes and administers tax laws ...
  2. Income Trust

    An investment trust that holds income-producing assets and trades ...
  3. Cash Distribution Per Unit - CDPU

    A measure, used in Canada, that refers to the amount of cash ...
  4. Distributable Net Income - DNI

    In the case of an income trust, an amount that is transferable ...
  5. Canadian Income Trust

    A type of corporate structure as designated by the Canada Revenue ...
  6. Tax Exempt

    To be free from, or not subject to, taxation by regulators or ...
Related Articles
  1. Tax-Saving Tips For Canadian Taxpayers
    Savings

    Tax-Saving Tips For Canadian Taxpayers

  2. Haunting Wall Street: The Halloween ...
    Options & Futures

    Haunting Wall Street: The Halloween ...

  3. Changes In Tax Legislation And Regulation
    Taxes

    Changes In Tax Legislation And Regulation

  4. What Is Fiscal Policy?
    Economics

    What Is Fiscal Policy?

comments powered by Disqus
Hot Definitions
  1. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  2. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
  3. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  4. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
  5. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  6. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
Trading Center