Update on the Canadian Tax Landscape
In this blog, we update you on the hotly contested July 2017 private company Canadian tax proposals. First, there is cause for modest celebration by business owners: the initial adverse proposals intended to i) limit access to the capital gains exemption and ii) prevent converting income received from a private corporation into lower-taxed capital gains … Continued
The federal Liberal government introduced their third budget yesterday. Budget 2018 concentrated more on spending and a political agenda rather than tax changes. We have outlined the key measures in the budget that will affect our clients. Passive Investment Income As expected, the budget introduced measures relating to holding passive investments inside a private corporation. … Continued
What is it? Passive income effectively refers to income earned on funds or investments that are not active business assets. For example, portfolio investments, stocks, bonds, rental properties, real estate investments. Proposed Changes The government is concerned that investing through a corporation creates an opportunity for much more rapid accumulation of wealth than would be … Continued
What is it? A capital gain is a gain realized on the disposition of capital property for tax purposes. Capital gains benefit from a one-half inclusion rate. For example, for a $100 capital gain, only $50 is included as taxable income. Proposed Changes Because the disparity between dividend tax rates and the lower capital gains tax … Continued
What is it? It is capitalizing on the lower marginal tax rates of family members and diverting corporate income to them. Proposed Changes The Tax reform proposals generally seek to curb using a corporation to split income with family members in a lower tax bracket who do not work in the business.
On July 18th, the Federal Government’s Department of Finance announced significant proposed changes to certain mainstream tax planning. Details have been released in a comprehensive, technical consultation paper focusing on tax practices commonly used involving private corporations. A brief summary of the proposed changes: Income splitting (dividends and salaries) with adult related individuals (i.e. spouses … Continued
House or condo purchases made for the purpose of renovating to increase value and imminently sell for large profits is commonplace. Too often, however, there’s no consideration regarding tax implications. Everyone seems to know someone engaged in speculative real estate transactions to make quick profits, often moving houses as part of the plan. Here’s what’s … Continued
On March 22, 2017, Finance Minister Bill Morneau delivered the 2017 federal budget (“the Budget”) and, as anticipated, it projects a deficit. Instead of planning to eliminate the deficit as previously proposed, the government says it will maintain a balanced net debt-to-GDP ratio of around 31 per cent over the next five years. The deficit … Continued
A tax question I am often asked, especially when thoughts turn to summer activities, whether one’s cottage should be owned by a family trust.
On February 25, 2016 Finance Minister Charles Sousa tabled his fourth Budget. Stronger economic growth in Ontario boosted government revenues resulting in the province's budget deficit to decrease to an expected $5.7 billion, down from the $8.5 billion projected at the end of 2015. The deficit is expected to drop to $4.3 billion for 2016-17 … Continued