On this blog, we will focus on Budget 2018’s proposal with regards to the Refundable Dividend Tax on Hand or RDTOH. Refundable Dividend Tax on Hand or RDTOH: Budget 2018 proposes that a refund of RDTOH be available only in cases where a private corporation pays non-eligible dividends. An exception will be provided in respect of RDTOH that arises from eligible portfolio dividends received by a corporation, in which case the corporation will still be able to obtain a refund of that RDTOH upon payment of eligible dividends. With regards to RDTOH Recapture – Connected Corporations: Currently, if a corporation obtains...
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On February 27, 2018, the Federal Government announced details of Budget 2018. Here are the Business Income Tax Measures proposed in this Budget, starting with the business limit reduction on passive investment income. Small Business Deduction - Business Limit Reduction on Passive Investment Income: Canadian controlled private corporations or CCPCs can avail of the lower tax rate on the first $500,000 (which is the federal business limit) of active business income. When retained earnings taxed at the small business rate are used to invest passively rather than in the active business, significant tax deferral advantages can be realized. Budget 2018 proposes...
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As promised, here are 3 more options you might want to consider for your RRSP: Your RRSP may now be an amended plan: If your RRSP was changed in 2017 and it no longer satisfies the rules under which it was registered, it is no longer considered an RRSP but an amended plan or fund. As such, the CRA will consider you to have received in 2017 an amount that equals the fair market value of all the property the plan held at the time it ceased being an RRSP. You may have other income and deductions from an RRSP: You...
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Are you nearing retirement? If you are, you might want to think about getting regular income from your RRSP. Generally, you may have a certain amount of flexibility on the types of income you can receive. You will have to contact your RRSP issuer and ask about the options available to you. Here are your options for your RRSP at any age up to the end of the year that you turn 71. Transfer your RRSP funds to a Registered Retirement Income Fund (RRIF): A year after you establish a RRIF, you can receive a minimum amount each year using a...
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