Topics To Discuss
- Introduction: tax reform in Canada and Internationally
- Proposals to prevent income sprinkling
- Proposals to limit claims for the lifetime capital gains exemption
- Proposals to modify the taxation of passive investment income of private corporations
- Proposals to limit conversion of income into capital gains
Proposal To Prevent Income Sprinkling
- Income paid to a family member from a CCPC will be taxed at the highest personal rate, unless the member can demonstrate his/her contribution to the business (extension of the "kiddie tax")
- The Government will introduce reasonableness tests for adult family members aged 18‐24, as well as those 25 and older
These adults will be asked to demonstrate their contribution to the business based on four basic principles—whether they have made a contribution through any combination of the following:
- Labour contributions;
- Capital or equity contributions to the business;
- Financial risks of the business taken on, such as cosigning a loan or other debt; and/or
- Past contributions in respect of previous labour, capital or risks.
To view the full presentation please click here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
We operate a free-to-view policy, asking only that you register in order to read all of our content. Please login or register to view the rest of this article.