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FEDERAL BUDGET 2018 - UPDATE ON LEGISLATION

Posted by David Gobeil on

Bill C-74, An Act to implement certain provisions of the budget tabled in Parliament on February 27, 2018 and other measures received Royal Assent on June 21, 2018.  Candidates for the CFP Examinations are responsible for legislation that has received Royal Assent 30 days before the examinations. The following income tax measures are of relevance for the CFP Examinations: lowering the small business tax rate and making consequential adjustments to the dividend gross-up factor and dividend tax credit; reducing the business limit for the small business deduction based on passive income; restricting access to dividend refunds on the payment of eligible...

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New Reporting Requirements for Trusts

Posted by David Gobeil on

Some taxpayers have used trusts in complex arrangements to prevent the appropriate authorities from acquiring this required information.  Even if a trust is required to file a return of income for a year, there is no requirement for the trust to report the identity of all its beneficiaries.  Given the absence of an annual reporting requirement, and the limitations with respect to the information collected when reporting is required, there are significant gaps with respect to the information that is currently collected with respect to trusts. The additional reporting requirements proposed in Budget 2018 have not yet been passed into...

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The Reduced Small Business Limit for CCPCs

Posted by David Gobeil on

The business limit for the small business deduction is the maximum amount of active business income on which a Canadian-controlled private corporation (CCPC) or associated group of corporations can claim the small business deduction. Bill C-74, An Act to implement certain provisions of the budget tabled in Parliament on February 27, 2018 and other measures received Royal Assent on June 21, 2018. This legislation reduces the business limit for CCPCs and their associated corporations that have income in excess of $50,000 from passive investments (ITA 125(5.1)). The business income of a corporation with passive income in excess of $150,000 will be...

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Measures to Address Income Sprinkling

Posted by David Gobeil on

In December 2017, the Government announced Simplified Measures to Address Income Sprinkling. Bill C-74, An Act to implement certain provisions of the budget tabled in Parliament on February 27, 2018 and other measures received Royal Assent on June 21, 2018 implemented these Measures, effective as of January 1, 2018. This legislation extended the tax on split income (TOSI) rules to certain adult individuals, but generally only to cases where the amount is unreasonable under the circumstances.  The tax on split income (TOSI) rules is a set of rules that require you or your family members to pay tax at the top...

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Federal Budget 2018 - Update on Legislation

Posted by David Gobeil on

On February 27, 2018, the Minister of Finance introduced the Federal Budget for 2018. On March 27, 2018, Bill C-74, An Act to implement certain provisions of the budget tabled in Parliament on February 27, 2018 and other measures, was tabled in the House of Commons. As of May 7,2018, Bill C-74 had only passed Second Reading in the House of Commons. Accordingly, it has not received Royal Assent by May 1, 2018 and you are not responsible for the changes on the May/June 2018 CFP Examinations.

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