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 …

Children Cannot Be Used As “Accomodating Parties” For Tax Planning

Caplan v Agence du revenue du Quebec[1] (Caplan) concerned distributions allocated from a discretionary trust to beneficiaries of a trust and then transferred to their father (also a beneficiary).  The court found that the children acted as an “accommodating party, whether as an agent or nominee, for their father.”  Moreover, they never had control over amounts paid to them by …

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 …

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 …

Valuing an Interest in a Discretionary Trust

  A trust is not a legal entity or person.  A trust does not hold title to property and cannot hold title to property.  The trustee(s) hold legal title for the benefit of the trust’s beneficiaries.[1]  Traditional trust law principles hold that a beneficiary of a discretionary trust does not have a property interest in the trust.  Such a beneficiary …