EMPLOYEE STOCK OPTIONS Many readers are likely aware how these employee stock options work. In general terms, if you are an employee and are granted a stock option from your employer corporation, you have the right (but not an obligation) to exercise the option and acquire shares in your employer’s corporation at an “exercise […]
In the wake of its doubling on July 1st, 2022, the Canada Revenue Agency’s prescribed rate will increase to 3 per cent on October 1st of this year. The rate, which sets interest rates for everything from tax refunds to outstanding tax debts, is currently set at 2 per cent. The prescribed interest rate is […]
FUEL CHARGE CREDIT FOR FARMING BUSINESSES The federal government recently introduced a refundable “return of fuel charge proceeds to farmers tax credit” to farming businesses to help them offset certain fuel charges that they incur in their farming businesses. The credit was passed into law on June 9, 2022, in Bill C-8. The credit applies […]
In the early days of the COVID-19 crisis, as the federal and provincial governments rushed to rollout a whirlwind of relief benefits, Canadians applied for income support programs for which they believed they were eligible–one of the most readily available being the Canada Emergency Response Benefit (CERB) Some of those applications were later deemed inappropriate, […]
FEDERAL BUDGET HIGHLIGHTS On April 7, 2022, the Federal government released its annual budget (they missed 2021 because of the pandemic), which included various income tax measures. Below is a summary of some of the more significant measures. As is often the case, there was no detailed draft legislation (technically a “Notice of Ways and Means […]
A key Canada Revenue Agency tax rate that impacts everything from the interest due on outstanding taxes to interest received on tax refunds, is about to double. The prescribed rate will increase to 2 per cent from the current 1 per cent, effective July 1st, 2022. The rate has remained at 1 per cent […]
RRSP VS. TFSA – WHICH IS BETTER? This is a question that comes up regularly in financial planning and tax planning circles. But before we attempt to answer the question, we need to know the difference in the tax treatment between these plans. Although some commentators call the first 60 days of the year the […]
REVERSIONARY/REVOCABLE TRUSTS A trust is a relationship under which a person, called a settlor, contributes cash or other property in trust for the benefit of others, called the beneficiaries. The trust is not a legal person or entity for most purposes, but it is considered a “person” and a “taxpayer” for income tax purposes. The […]
ASSOCIATED CORPORATIONS Under the Income Tax Act, there are various rules pertaining to relationships between taxpayers, including individuals, trusts, and corporations. For example, there are rules that apply to “related” persons, “non-arm’s length” persons, “affiliated” persons, and “associated” corporations. The rules are generally restrictive in nature, and the tax policy reasons for the rules are […]
PROPOSED LUXURY TAX ON EXPENSIVE CARS, BOATS AND PLANES The Liberal government is planning to introduce a new Luxury Tax, to take effect on January 1, 2022. It will apply to: new cars, SUVs and pick-up trucks costing over $100,000 boats costing over $250,000 certain aircraft costing over $100,000 The tax will be 20% of the […]
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