Pre-Budget Tax Planning Extended

On March 8, 2021, the Liberals announced that there won’t be a Federal Budget released in March 2021 (as originally expected), and possibly not in April 2021.  At this point we are expecting a Budget at some point in Spring 2021 (more than 2 years since the last Budget) but its not clear or certain that this will happen.  The …

5 Strategies Where COVID-19 Can Reduce Taxes

There are are at least 5 strategies that can be executed under existing tax legislation to use COVID-19 to generate tax relief.  These strategies were originally posted by us 7 weeks ago on March 19th.  In particular, strategy No. 5 discussed below anticipated a reduction in the prescribed interest rate to 1% from the current rate of 2%, which will now be …

New Ownership Disclosure for Private Corporations

The Canadian federal, provincial and territorial finance ministers executed the Agreement to Strengthen Beneficial Ownership Transparency in 2017.  The agreement required the finance ministers of each government and territory to pursue legislative amendments to corporate statutes (and other relevant legislation) to ensure that corporations hold “accurate and up to date information on beneficial owners that will be available to law …

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 …

Choosing a Business Vehicle

There are three common types of legal structures for a business: sole proprietorship, partnership, and corporation.  The advantages and disadvantages of each structure are explained below.   Sole Proprietorship   This structure is informal and easily created.  The business and the operator are the same to legal and tax authorities.  The business’s profits, debts and responsibilities are those of the …

Tax Planning – Before It’s Too Late

Over the past 4 years or so, we have experienced an unprecedented increase in the complexity of private company taxation.  With another Liberal government recently elected, which is supported by the NDP and Green Party, we can certainly expect further tax changes which will more likely than not include increasing tax rates.  Of particular concern is the rumor that both …

Update on the July 18th Tax Proposals

On July 18, 2017, Finance Minister Morneau announced changes to the Canadian tax system.  The announced changes were marketed at being aimed at improving fairness in the tax system.  The announcement targeted the following:   Income (dividend) sprinkling and multiplying the lifetime capital gains exemption (LCGE); Converting dividend income into capital gains (known as “surplus stripping); and Passive investment income …

Income Splitting Post-Morneau’s Tax Proposals (Part II)

There are a number of methods used to accomplish income splitting, with advantages and disadvantages to each – for example, income could be split through paying salary to family members, dividends, or through the use of more complicated tools such as a family trust. The preferred method will depend on the tax and non-tax preferences of each business owner.  Click …

Non-Arm’s Length Transfers

Under Canadian tax law, special rules often apply to transfers of money and property between family and friends. The classification of whether a transaction is at “arm’s length” is an essential concept in the federal Income Tax Act (the “Act”). In many instances, a non-arm’s length transaction can give rise to tax consequences that do not correspond to its economic …