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Last July 2017, the government announced its plan to close tax loopholes that give unfair tax advantages to business owners.  Understandably, there has been a lot of backlash from business owners regarding the proposed tax changes to address tax planning strategies used by private corporations.  The proposed changes can potentially harm the business community which is why we encourage everyone affected by these changes to take action.  There are a number of ways to let your opinions be heard. 1.    Participate in the Department of Finance’s public consultation by sending your comments to: fin.consultation.fin@canada.ca.  Be sure to send in your consent...
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In this second part of our blog series, we are looking further into the last 2 proposed measures to address income sprinkling.  1.    Constraining multiplication of claims to the lifetime capital gains exemption (LCGE): The Government is concerned with the use of family trusts to facilitate arrangements under which the LCGE limits of multiple family members of a family may be used to reduce capital gains tax.  There are 3 proposed measures to address LCGE multiplication. -      Individuals would no longer qualify for the LCGE in respect of capital gains that are realized, or that accrue, before the taxation year in...
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Last July 18th, 2017, the Department of Finance released information regarding some proposed tax changes aimed at addressing tax planning strategies commonly used by private corporations. These strategies include income/dividend sprinkling, passive investment income and converting income to capital gains.  The Department of Finance describes these three key tax planning strategies as follows: -      Sprinkling income using private corporations – This strategy shifts income from an individual on a higher personal income tax rate to a family member on a lower personal income tax rate or who may not be taxable at all. -      Holding a passive investment portfolio inside a...
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