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Tip 7 – Tax on Split Income | Tax on Passive Income

This note continues Tax Principal Raffaele Ruberto’s ten-week Friday Tax Tip series, helping business owners and their family members mitigate the new Tax on Split Income (“TOSI”) and upcoming Tax on Passive Income (“TOPI”) rules.

As always, if there are any topics you would like addressed, or have specific questions you need answered, just send an email to

Tax on Split Income | Tip 7

You may have been informed that the TOSI rules prevent the payment of dividends from your operating company to your holding company, and restrict dividend sprinkling with non-active family members.

Although this is true, the effects can sometimes be mitigated by the reorganization of capital, followed by an amalgamation and if necessary, a spin-off of assets to a new corporation.

Please contact SB Partners to learn more, or to discuss any of our signature TOSI Solutions.

Tax on Passive Income | Tip 7

Corporations may want to consider using funds for the repayment of outstanding shareholder loans to individual shareholders, instead of using such funds for the purchase of passive income generating assets.

This strategy helps preserve the corporation’s small business deduction.

Please contact SB Partners to learn more, or to discuss a variety of our signature TOPI Solutions.

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