Powers of Attorney – What Are They and How Do They Work?

A Power of Attorney is a document in which you give to someone else (your “attorney”) the right to make decisions for you in the event that you are no longer capable of making decisions on your own.   There are two types of Power of Attorney:   Power of Attorney for Personal Care – The person you name is …

The Meaning of “Voluntary” for Purposes of the Voluntary Disclosure Program

The Canada Revenue Agency’s (CRA) voluntary disclosure program (VDP) allows taxpayer to correct inaccurate or incomplete information or disclose unreported information for up to 10 previous years.  On March 1, 2018, the program was divided into two tracks: the general program and the limited program.  Taxpayer’s who fall under the general program will be granted interest relief, will not be …

Federal Budget 2019 – Will This Be The End of Capital Gains Planning

  As the personal tax rates have increased to 53.53%, the tax spread between dividend income and capital gains has widened significantly.  As a result, planning has evolved whereby a taxpayer creates a capital gain as a means of extracting corporate funds instead of paying themselves a dividend, which would be taxable at a higher rate.  For example, if an …

Solicitor Client Privilege

­Solicitor-Client Privilege Generally   Solicitor-client privilege (also known as “legal advice privilege”) operates to protect communication between a lawyer and his/her client from disclosure to third parties.  The privilege belongs to the client and can only be waived by the client.  Solicitor-client privilege is not time sensitive and does not expire.   Communication is subject to solicitor-client privilege when three …

Donations Made By Graduated Rate Estates

In 2016, the Department of Finance introduced the “graduated rate estate” (GRE).  Since that time, any special relief in the Income Tax Act which applied to testamentary trusts now only applies to GREs.  There are various advantages to an estate which is designated a GRE.  One of the most significant benefits relates to testamentary donations.   What is a Graduated …

Milne Decision Overturned

In September 2018, the decision of Milne Estate (Re)[1] was released and cast doubt whether the long-standing practice of preparing two Wills—one, which is submitted to court for probate and the second, which is not and is used to reduce probate fees  (also known as Estate Administration Tax)—could continue to be used as an estate planning tool in Ontario to …

A Trustee’s Duty to Disclose

Family trusts are often used as part of tax and estate planning.  When a trust has been settled, the trustees should be aware of their duty to disclose.   Trustees owe a fiduciary duty to act in the best interests of the beneficiaries and there are practical reasons for why beneficiaries need information about the trust: to complete their tax …

Employee Stock Option Plans

Deemed Benefit and Tax under Section 7   Section 7 of the Income Tax Act[1] taxes an employee’s benefit derived from the exercise of rights under a legally binding agreement with an employer to sell or issue shares to the employee.  Section 7 applies where a corporation has agreed to sell or issues shares to the employee.  If there is …

The CRA’s Civil Liability

The tax system in Canada is a self-reporting system.  Taxpayers are expected to calculate their taxes and pay as necessary and the  Canada Revenue Agency’s (CRA) role is to administer Canada’s tax laws. Lately, taxpayers have achieved some success in the civil courts holding the CRA liable for abusive audits and tax collection practices.  The (limited) success ought to serve …