On July 18, 2017, the Honourable Bill Morneau, federal Minister of Finance, issued draft legislation which, if passed, will significantly change tax planning for Canadian private companies and their shareholders.
He released proposed changes to three areas of tax planning used by private corporations: income sprinkling, holding passive investments in a private corporation and converting income into capital gains.
TAX TIP When it comes to tax, it’s all about the details. Knowing the rules and regulations, what qualifies and what doesn’t, and how to structure your business most effectively. We are focused on every facet of tax. We have the in-depth knowledge and experience that will allow you to capitalize on all the opportunities available. We know what to look for, right down to the smallest details. And it’s the small details that can add up to make a big difference. For more information on how the proposed changes may affect you and your business, please contact us now.
Strategies that have been the basis for shareholder remuneration planning for decades may be eliminated. The proposed changes are fundamental and may have widespread impact on current structures and future planning.
The proposed legislation has been open for an absurdly short 75-day public consultation ending October 2, 2017.
It will take time to digest all the proposals, go through the consultation process and assess the legislative amendments.
What can be said with certainty, however, is significant changes may be coming.
HALPERN Chartered Professional Accounting Firm will be working with our clients to determine the potential effect of such changes on their businesses and how to mitigate the impact of these changes.
TAX TIP Under the proposed legislation, there may be some relief for a Trust to use the lifetime capital gains exemption before it is lost. This will require advanced planning and likely a valuation of your business. This opportunity expires after 2018. Please contact us now for professional assistance regarding your tax situation.
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HALPERN Chartered Professional Accounting Firm is a full-service Tax, Accounting, Business Advisory and Financial Planning CPA firm. Accurate and timely information is only one piece of any effective solution. We are dedicated to bringing you all of the pieces together – knowledgeable and innovative advice, leading-edge technology, and a strong relationship with our clients. This type of creative thinking enables us to help you and your business organization to solve complex problems and significantly enhance your ability to improve performance, manage risk and build value.
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