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 […]
HOW OPTIONS ARE TAXED An option to purchase a property, as the term implies, provides the holder of the option an optional right to purchase the property. The option is referred to as a call option. The purchase price under the option is sometimes called the exercise price or strike price. Conversely, an option to […]
DEATH AND TAXES You’ve heard the saying about this − there are two sure things in life. On top of that, when you die, there may be additional income tax payable owing to the “deemed disposition” rules and other rules that apply specifically upon death. Before we get to those issues, in the year of […]
The very brief federal election campaign that few Canadians wanted is now over. We know which party will form the next government and which ones will provide the support that the victorious Liberals need to govern. It was no surprise that neither the Liberals nor the Conservatives garnered enough seats to win a majority. Now […]
TAX PLANNING AND ADVANCED LIFE-DEFERRED ANNUITIES (ALDAs) If you own a registered retirement savings plan (RRSP), you must wind it up by the end of the year in which you turn 71. At that point, you have the following options. First, you can take out all the funds in one lump sum. However, since the […]
NON-ARM’S LENGTH PROPERTY TRANSFERS Overview There are special rules under the Income Tax Act (the “Act”) that apply to property transfers to a non-arm’s length person. The rules, discussed below, can override the actual proceeds or sales price received on the property transfers. For most purposes, “related” persons, as defined in the Act, are non-arm’s […]
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