The Personal Financial Planner's Manual™
Summary of Contents of Update 59

To have the information on home ownership in one place, this Chapter now includes the RRSP Home Buyers’ Plan. The Home Renovation Tax Credit (HRTC) and the First-Time Home Buyers’ Tax Credit have been added to the Chapter. This Chapter has also been updated for the housing price survey from Royal LePage and rates for housing starts and interest rates.
 

Planning for the Disabled

This Chapter has been updated for the 2009 income tax rates and changes to the Canada Disability Savings Act.
 

This Chapter has been updated for the 2010 personal tax rates and credits. In particular, the conversion rate for the Working Income Tax Benefit (WITB) has been increased to 25%.
 

This Chapter has been updated for the new tax credits that the Income Tax Act allows for minimum tax purposes.
 

Tax-Free Savings Accounts

On October 16, 2009, the Minister of Finance introduced amendments to address concerns regarding the use of TFSAs in tax-planning schemes. The proposed amendments would:

1. prohibit asset transfers between registered or non-registered accounts and TFSAs;
2. subject any income reasonably attributable to deliberate overcontributions to a penalty tax of 100%;
3. subject any income reasonably attributable to prohibited investments to a penalty tax of 100%;
4. ensure that the withdrawal of amounts in respect of deliberate overcontributions, prohibited investments, non-qualified investments, asset transfer transactions and income related to those amounts do not constitute distributions for TFSA purposes and thus do not create additional TFSA contribution room.

This Chapter has been deleted.
 

This Chapter has been updated and describes the tax credits to provide relief for students.
 

This Chapter has been updated and the example on page 17 concerning Mathew’s CESG contribution room has been corrected.
 

This Chapter has been updated and moved to Education Planning from Retirement Planning.

This Chapter has been updated for the 2010 benefit and contribution rates. It also includes the recent changes to the Canada Pension Plan for the removal of the work cessation test, the increase in the general low earnings drop-out, the new requirement to make CPP contributions until 65 years of age and the increase in the actuarial adjustments from 0.5% per month to 0.7%.

The legislation to implement Budget 2009 allows, upon the final distribution of property from a deceased annuitant’s RRSP or RRIF, the amount of post-death decreases in value of the RRSP or RRIF to be carried back and deducted against the year-of-death RRSP/RRIF income inclusion. The examples in the Chapter have been updated.
 

The material on the Home Buyers’ Plan has been included in Chapter 2-04, Home Ownership. The material on the Lifelong Learning Plan has become Chapter 5-05 in the Section on Education Planning.
 

The Chapter has been updated for the 2010 federal income tax factors, contribution limits for registered plans, prescribed interest rates, Canada Pension Plan contribution rates, automobile deductions and benefits, and the latest statistics on the Consumer Price Index.