Morneau Proposals – Take Two

Morneau’s Tweet

As most readers are aware, the federal government’s small business July 18 tax proposals created an enormous backlash, with many groups and individuals, including yours truly making submissions to voice their concern. It appears the government heard the outcry as it has softened its stance to varying degrees on its new proposals. Here is a summary of how things now stand:

Income Sprinkling

The original proposals would extend the Tax on Split Income (“TOSI”) to dividends received by adults, unless they can show that the dividends are reasonable in light of their labour and/or capital contributions to the business.

The response by the tax and business communities focused mainly on the uncertainty of what might be considered “reasonable” and how this might translate into an acceptable dividend.

The finance minister has announced that it intends to move forward with the income sprinkling proposals. It intends to ensure that the rules will not impact businesses to the extent there are clear and meaningful contributions by family members. It will introduce reasonableness tests for adults in two categories – those aged 18-24 and those aged 25 and older. Adults will be asked to demonstrate their contribution to the business based on four basic principles:

  • Labour contributions
  • Capital or equity contributions
  • Financial risk, such as co-signing a loan, and/or
  • Past contributions of labour, capital or risks

While no new draft legislation has been released, the government states that the concerns surrounding uncertainty have been heard and they will simplify the proposed measures and reduce the compliance burden. Stay tuned to see what the specific legislation will contain.

Multiplication of the Capital Gains Exemption (“CGE”)

The original proposals would have disallowed the lifetime capital gains exemption on the sale of Qualified Small Business Shares and Qualified Farming Property as follows:

  • Elimination of CGE for minor children
  • Imposing TOSI reasonableness tests on availability of the CGE
  • Elimination of CGE for property held in a trust

After review, the government has backed off on all of the above proposals and will not be going forward with any of them.

Converting Income into Capital Gains

These proposals were designed to curtail what the government perceived as abusive “surplus stripping”.  It would have extended the rules in section 84.1, to any non-arm’s length sale of shares to a corporation. It would also have applied dividend treatment to any such sale, even where tax had already been paid on a previous capital gain on the same shares.

These proposals would have eliminated the “pipeline” strategy, widely used to limit the incidence of taxes on the death of an individual shareholder to a single capital gain in the hands of the deceased. It would have greatly increased the chances of gains on private company shares being taxed twice.

Thanks to the concerns expressed by the tax and business communities, the government has backed off completely on these proposals and will not be going forward with them.

This is great news for those who still have reservations about the legitimacy of implementing the Pipeline strategy on the death of a private company shareholder as the government specifically mentioned that it was responding to concerns about taxation on death.

Holding Passive Investments

The initial proposals addressed concerns that shareholders of private corporations are able to defer the ultimate taxation on their savings, thereby creating a larger pool of capital to be invested for retirement. This is an advantage that a shareholder of a private corporation enjoys compared to a person without a company and is to be eliminated.

After consulting with the public, the government, while not abandoning the proposals, has agreed to relax them.

First, any capital already in existence will not be affected by the new rules. They will not apply retroactively to existing retained earnings.

Second, there will be a base amount of $50,000 of passive income that a corporation may earn each year while still not having the rules apply. This is the equivalent of $1 million of capital invested at a 5% rate of return. Any income above that amount will not benefit from the tax deferral.

There is still no draft legislation to indicate exactly which mechanism will put in place. The new year should bring new announcements and more details in this important area.

Response to Tax Proposals – Part 1

As predicted, the Minister of Finance, Bill Morneau started a firestorm in July with his proposals to reform the small business corporations tax system. I have added my voice to the concerns of my colleagues and clients in a letter to the minister. Due its length, I will reproduce it here in two parts. Part 1, deals with the general tone and sweeping nature of the proposals. In Part 2, to be published tomorrow, I address the specific proposals themselves, offering suggestions for improvement.

Part 1 – Overall Tone and Targeting of Incorporated Small Businesses

I am troubled, as are many of my clients and colleagues, by the language used in the Minister’s letter introducing the proposals. He states that the government is taking steps to “close loopholes that are only available to some – often the very wealthy or the highest income earners – at the expense of others.” He goes on to state that “There is evidence that some may be using corporate structures to avoid paying their fair share, rather than to invest in their business and maintain their competitive advantage.”

This language is disturbing. The Income Tax Act sitting on my desk at this moment weighs in at 2484 pages of charging provisions, income inclusions, allowable deductions, tax rates, formulas, incentives, penalties and anti-avoidance rules. The rules used by everyday small business owners in carrying on their day-to-day businesses, which you have characterized as “loopholes” have been entrenched in the law since its inception. They were addressed in the Carter Commission report in 1966. They have been sanctioned and approved in numerous decisions of the Supreme Court of Canada. For you to suggest that incorporated small business owners are using “loopholes” to “avoid paying their fair share” “at the expense of others” seems unfair. With respect, it appears that you are using this kind of inflammatory language to bolster your popularity among what you perceive as your political base of support, at the expense of hard working and honest tax-paying Canadian small business owners.

Furthermore, for you to suggest that small business owners should be using their accumulated earnings to “invest in their business and maintain their competitive advantage” is presumptive and unwarranted. The business decisions made by owners of small enterprises are not the concern of the government. While the tax system currently does provide incentives for certain types of investment behaviour, the suggestion that a business owner who chooses to invest his hard-earned money for his retirement rather than risk it in further business investment is going beyond your purview. Indeed, even the Supreme Court of Canada, in the Case of Stewart v. Canada refused to allow the government to interfere with a taxpayer’s business decisions, regardless of whether they generated profits or losses.

While it may be true that there are certain ways in which taxpayers who conduct their businesses through corporations have the potential to enjoy certain advantages from a tax point of view, there are many factors and moving parts in making the decision to incorporate. Furthermore, there are many extraneous factors that affect incorporated businesses which should be taken into account when comparing the tax status of an incorporated business with that of an employed individual. It appears that these factors have been totally ignored by your government, which is why the only conclusion that many taxpayers, myself included can reach, is that that these proposals are a clear attack on a specific segment of the taxpaying public, designed to increase the government’s political capital with so-called “average Canadians”.

Here are some of the factors that I refer to:

A taxpayer who makes the decision to go into business takes risks with their lives that cannot be measured in dollars and cents. They often leave the security of a job for an uncertain future. If the rewards of success are diminished, as they surely would be under the Proposals, the incentive to leave a job and risk starting a business endeavour is reduced.

The Proposals are a clear attack on small business owners. While it is true that the tax benefits of incorporation don’t really kick in unless the business earns, as a general rule of thumb, more than $150,000 of profit, the Proposals are singling out business owners as being so-called “wealthy Canadians”. Firstly, the use of the buzzword “wealthy” was clearly intentional and has its obvious negative connotations in a political context. Secondly, small business owners are not the only taxpayers who earn higher than average incomes. The government does not address the advantages enjoyed by salaried individuals. And let’s not compare small business owners earning over $150,000 with the average salaried employee who makes $50,000. Let’s compare them with employed individuals who make over $150,000 per year. Let’s call them “Rich CEO’s”, for lack of a less inflammatory term. Rich CEO’s, in general are able to enjoy the following benefits:

  1. No risk to personal capital
  2. Stock option benefits
  3. Company-funded private registered pension plan
  4. Paid vacation time
  5. Paid maternity/paternity leave
  6. Employment insurance
  7. Severance package upon termination
  8. Low-interest housing loans
  9. Health insurance benefits
  10. Life insurance benefits
  11. Automobile benefits
  12. Entertainment expense accounts
  13. Reimbursements for travel expenses
  14. Reimbursement of relocation expenses
  15. Golf club membership
  16. Prizes and corporate scholarships
  17. Christmas bonuses
  18. Performance bonuses

None of the above seems to have been affected by the Proposals.

On the other hand, a small business owner enjoys none of the above Rich CEO perks. On the contrary, he or she makes the following sacrifices when becoming involved in a business endeavour:

  1. Risk of capital – often life’s savings
  2. Risk of start-up losses
  3. Risk of business failure
  4. Risk of personal bankruptcy
  5. Risk of legal attack from clients and suppliers
  6. Risk of audit by CRA and/or Revenu Quebec
  7. Incurring personal debt, often mortgaging their homes
  8. Entering into lease obligations
  9. Requirement to keep bookkeeping records and file corporate returns
  10. Payroll obligations
  11. GST/HST/QST obligations
  12. Employer portion of CPP/EI/Health care
  13. Personal liability for deductions at source
  14. Personal liability for GST/HST/QST payments
  15. Unstructured and unlimited working hours
  16. Need for family involvement

None of the above risks are taken by Rich CEO’s and again, none of these factors is mentioned in the Poposals.

I personally offer my services to both incorporated business owners and Rich CEO’s. I would like to offer an example of a comparison of the annual accounting and legal fees involved in incorporating and maintaining a small business with those incurred by a Rich CEO.

Incorporated Business                                                          Rich CEO

 

Initial Incorporation fees                         $     2,500
Annual bookkeeping fees                               10,000
Annual legal fees                                                2,000
Annual external accounting fees                   15,000
Annual registration fees                                        107
Annual personal tax preparation                     1,500                         1,500

Total fees                                                      $    31,100                        $1,500

As you can see, the increased costs faced by a business owner simply to comply with existing tax laws and legal obligations makes the Proposals that much more difficult to digest.

In conclusion, the Proposals seem to me to be a clear attack on a large sector of the population that the average middle class Canadian – your constituency, would not have a problem hurting, especially given that you have characterized them as wealthy Canadians taking advantage of tax loopholes. This is clearly not the case, and the Proposals in general are prejudicial and unfair.

The Morneau Massacre of 2017

loopholes

If you’ve just returned from vacation and wondering what’s new in the tax world, you’d better sit down and take a pill. On July 18, finance minister Bill Morneau rolled out the federal government’s proposals designed to “close loopholes and deal with tax planning strategies that involve the use of private corporations”. In short, Finance is proposing to tax an axe to many of the tax strategies that have been available to small business owners and professionals up until now.

The proposals are complex, comprehensive and wide-ranging, covering the following main areas of tax planning:

  • Income sprinkling
  • Multiplication of the capital gains exemption
  • Converting a private corporation’s regular income into capital gains
  • Holding investments inside a private corporation

Income Sprinkling

This strategy involves the splitting of income to take advantage of lower marginal tax rates available to family members. Many rules have been put in place over the years to curtail this practice. Most notably, the tax on split income (TOSI), or “kiddie tax” applies the highest marginal tax rates to certain dividends paid to minor children.

With the new proposals, the TOSI will no longer be limited to minor children. Complex new rules will apply the TOSI to dividends paid to adult individuals unless such dividends are reasonable in light of that individual’s labour contributions and/or capital contributions to the corporation.

The TOSI will also be expanded to apply to capital gains on property, the income from which was subject to the TOSI. Further, it will also apply (for individuals under age 25) to “compound income” that was previously subject to attribution rules or the TOSI.

These proposals are scheduled to apply to for the 2018 and later years.

Multiplication of the capital gains exemption

A capital gains exemption (CGE) of up to $800,000 (indexed) is currently available to any individual on the sale of qualifying shares of a private company. Issuing shares to family members, either directly or through a trust, is a common way to multiply this tax benefit.

The finance minister has proposed a three-pronged approach that will eliminate the multiplication of the CGE:

Age limit: The CGE will no longer be available to individuals where the gain occurs in any year before the individual reaches the age of 18 years.

Reasonableness test: In essence, this rule will deny the CGE on any gain on the sale of shares if the gain from those shares is subject to the TOSI measures described above.

Trusts: With exceptions for spouse or alter ego trusts the GCE will no longer be available on any gain on a share that is held by a family trust.

These proposals will apply to dispositions after 2017. However, there will be transitional rules that will allow an elected deemed disposition at any time in 2018. The fair market value of the shares would have to be determined, and the qualification criteria for the CGE will be treated as being satisfied if they are met at any time in the preceding 12 months.

Converting a private corporation’s regular income into capital gains

Normally, a distribution of a corporation’s retained earnings is considered a dividend and taxed as such. The top rate on dividends is approximately 44%. Strategies have been used with varying degrees of success to arrange for dividends to be transmogrified into capital gains, which are taxed at 25%. This involves the utilization of the high cost base on shares that have been acquired through a non-arm’s length transaction that had previously triggered a capital gain. Current rules are in place to curtail such “surplus stripping” in limited circumstances. Section 84.1 effectively forces a return to dividend treatment where the capital gains exemption was claimed on the previous capital gain.

The government proposes to extend these rules to any situation where a non-arm’s length transaction involved even a fully taxable capital gain. This proposal is meant to address what has become known as the “pipeline” transaction.

The pipeline has been used extensively in recent years as a post-mortem planning tool to avoid double-taxation where the capital is deemed to occur on the death of a corporate shareholder. Unless the current proposals are altered, the pipeline strategy will no longer be available to an estate.

These proposals will take effect for all dispositions that occur after July 18, 2017. There will be no room for transitional planning.

Holding investments inside a private corporation

One of the long-standing advantages of incorporation is the tax deferral that comes with lower rates on business income. Once the retained income has accumulated over time, the company will have a larger amount available for investment. This has been a great contributor to the retirement of many small business owners. However, it is an advantage that salaried persons or those who don’t incorporate cannot access. Accordingly, the government proposes to eliminate it.

Of all the proposals announced, this is the only one that is not fully developed with draft legislation. The Minister has included some suggested strategies to deal with the issue, each one complex in its own right, and generally altering the system of integration currently in place by eliminating the effect of the corporate tax deferral for future passive investment.

The Minister acknowledges that there currently exists a significant amount of capital invested within private corporations, and it is not his intent to affect these holdings. Any new rules will have effect on a going-forward basis.

These proposals are subject to a consultation period which will end on October 2, 2017. Interested parties should write to the Minister of Finance with any concerns before that date. I suspect that it will be an interesting and eventful autumn for the tax community.

The End of the Tax Mulligan

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What happens when a transaction is undertaken that is planned to be tax-free, but due to an unforeseen error in the execution of the plan, it is subsequently discovered that tax is payable? Until recently, if all else failed, one option was to apply to the courts to allow for “rectification”. That is, since the parties to the transaction originally based their actions on the assumption that the plan was tax-effective, ask the courts to allow them to “redo” the deal correctly to restore its original tax-free intent.

Rectification is essentially not a tax concept. It generally applies where parties to a transaction discover that the legal documents that apply do not accurately represent the agreement or intent of the parties at the time. When both parties agree, the courts are inclined to grant relief and allow for a retroactive correction of the legal documents.

Back in 2000, in the case of Juliar, rectification was granted in a tax context to correct what was essentially an error on the part of the tax planners. Simply put, Mr. and Mrs. Juliar transferred shares to a holding company on the assumption that the shares had a high adjusted cost base (ACB) and no rollover provision was made. When it was subsequently discovered that the ACB was indeed low, they applied to the court for rectification, asking to convert a taxable sale to a rollover under section 85 of the Income Tax Act. The court agreed.

Since then, the case of Juliar has been cited often in cases where mistakes in legalities have created undesired tax results. However, in the recent decisions of Jean Coutu and Fairmont, the Supreme Court has overturned Juliar and has put an end to the idea that rectification can be used as a tool to correct errors in tax planning and its execution.

The court in Fairmont stated:

“…rectification is not equity’s version of a mulligan. Courts rectify instruments which do not correctly record agreements. Courts do not “rectify” agreements where their faithful recording in an instrument has led to an undesirable or otherwise unexpected outcome.”

Juliar was expressly overturned on the basis that the decision resulted in “impermissible retroactive tax planning”.

There is a famous decision (Shell Canada) that stands for the idea that a taxpayer is taxed on the way it arranges its affairs, rather than how it could have arranged its affairs. This concept is often referred to when a legal transaction is executed poorly, resulting in unintended tax consequences. These new decisions are in line with this concept, and they take away a weapon of last resort for taxpayers and their advisors.

2017 Federal Budget Summary

Under the Auspices of the Order of Chartered Professional Accountants of Canada, I am pleased to provide a summary of 2017 Federal budget summary/ 2017 Résumé du budget fédéral. I will also place a link on the Tax Links Page, and it will remain there, along with past federal and Quebec budget summaries for future reference.

Can Employees Deduct Cost of Cell Phone Plan?

Get_Smart

This should be an area of interest to pretty much anyone that owns a cell phone, so I thought I’d reproduce it here. It’s a recent CRA technical interpretation on the question of whether the cost of a cell phone plan is deductible from employment income.

Deductions from employment income must be specifically provided for under the Income Tax Act. Section 8(1)(i)(iii) deals with supplies used up in the course of performing employment duties. There must be a requirement under the employment contract for the employee to pay for his own supplies, and the employer must sign form T2200 to attest to this requirement.

The CRA was asked whether the cost of a basic cellular service plan is deductible from an employee’s employment income where an employer requires the employee to use a cellular phone to perform employment duties.

CRA Response: It is a question of fact. Section 8(1)(i)(iii) of the Income Tax Act (the “Act”) provides a deduction to an employee for “the cost of supplies that were consumed directly in the performance of the duties of . . . employment and that the . . . employee was required by the contract of employment to supply and pay for.” For supplies to be considered consumed directly in the performance of employment duties, the supplies must be used up and play an integral and essential part in the performance of the employment duties. The cost of the supplies should also be reasonable.

Based on the above, cellular minutes and data would be considered “supplies that were consumed directly” where it is determined that the cellular minutes and data were used up and played an integral and essential part in the performance of the employment duties. It is our understanding that service providers typically provide a detailed breakdown of each cellular minute used, but do not similarly provide a detailed breakdown of cellular data used. It is our view that without a detailed breakdown an employee would not be able to substantiate the amount of cellular  data that was used for employment purposes. Where the cellular minutes or data and costs cannot be substantiated, a deduction from employment income is not permitted under s. 8(1)(i)(iii) of the Act. If an employee can substantiate that they used their cellular phone exclusively for employment purposes (i.e., no personal use), it is our view that the basic service plan may reasonably reflect the cost of those cellular minutes and data. Where there is both employment and personal use and the employment use can be substantiated, an employee may apportion the basic service plan on a reasonable basis. However, if only the employment use of cellular minutes can be substantiated, only the portion of the basic service plan for minutes may be apportioned (i.e., the portion of the basic service plan for data cannot be deducted).

Sold your House? Make Sure You Report It!

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If you have sold your home recently, you should take note of the new reporting rules announced by the CRA regarding the principal residence exemption (“PRE”).

The PRE applies on a pro-rata basis based on the number of years you are claiming the house as your principal residence. Form T2091 is technically required to report and claim the PRE on the sale. If you were claiming the exemption for the full period of ownership, then the gain on the sale is fully exempt from tax. The CRA’s policy until now has been that no reporting was required in such a case.

However, for 2016 and future years, this administrative policy has changed. Form T2091 is still not required if the full exemption is claimed, However, the sale must be reported on Schedule 3 of your tax return for the year. You will need to report a description of the property,  the year of acquisition and  the proceeds of disposition. Failure to report the sale will result in the denial of the PRE. However, you may go back and amend your return to report the sale and claim the exemption, subject to possible penalties of $100 per month to a maximum of $8,000.

For Quebec tax reporting, there has never been any administrative policy regarding a fully exempt sale of a principal residence and form TP-274 continues to be required.

Changes for Trusts

If your principal residence is owned by a trust, new rules will apply to you. I outlined the current rules in a previous post.

Under the new rules, only certain specialized trusts are now eligible to claim the PRE. They are alter-ego trusts, certain spousal or common law partner trusts, certain protective trusts or certain qualified disability trusts.

Starting in 2017, any trust that owns a home and does not fit within any of the categories above, will no longer be eligible for the PRE on the sale of the home. Therefore, if the house is sold before the end of 2016, the PRE can still be claimed.

For 2017 and later years, a home that was owned by a trust that no longer qualifies for the PRE will be allowed to calculate the exemption based on transitional rules that would require a valuation of the property as at the end of 2016. The PRE will be available for the “notional” gain up to the end of 2016, while the future growth in value will be subject to capital gains tax.

Anyone who currently lives in a home owned by a personal trust should consult their tax advisor.

Changes for Non-Residents

New rules will also apply to anyone who was a non-resident at the time they purchased a residential property in Canada. Under the current rules, the pro-rata formula that is used to calculate the PRE allows for an extra year (the plus 1 rule) in calculating the exemption. This generally allows for the fact that in a year where someone sells their home, they may own two properties, both of which should qualify for the exemption.

For a non-resident, the plus 1 rule allowed them to claim a portion of their gain as exempt, even though they never qualified since they were non-residents of Canada. Accordingly, for all sales on or after October 3, 2016, the Plus 1 rule will no longer be available to any taxpayer who was a non-resident of Canada in during the year in which he or she acquired the property. There are no transitional rules to this provision.

2016 Federal Budget Summary

Under the Auspices of the Order of Chartered Professional Accountants of Canada, I am pleased to provide a summary of 2016 Federal budget summary / 2016 Résumé du budget fédéral. I will also place a link on the Tax Links Page, and it will remain there, along with future federal and Quebec budget summaries for future reference.

Death of Testamentary Trust Rules

Turkey-Estate-Plan

The favourable tax rules enjoyed by estates and testamentary trusts until now are almost dead.  Major changes that were introduced in the 2014 federal budget are about to come into effect on January 1, 2016. Don’t be caught off guard.

Estate vs. Testamentary Trust

Until now, most of us have viewed a testamentary trust in basically the same way we would an estate. They both essentially were included in the definition of a “Testamentary Trust”, meaning a trust arising as a consequence of the death of an individual. As such, they were treated in similar fashion under the law, both benefiting from graduated tax rates and both able to have an off-calendar fiscal period for tax purposes.

But now, we must make a distinction between an estate and a testamentary trust.

A testamentary trust is generally a trust that is created by the will of the deceased person. Assets from the deceased’s estate are transferred to the trust for the benefit of named beneficiaries. These assets are then administered by designated trustees. Such a trust could go on for an indefinite period of time, depending on the terms of the trust.

On the other hand an estate is essentially the bundle of assets owned by an individual at the time of death, which is to be distributed by the liquidator to the beneficiaries pursuant to the will within a relatively short period of time. The CRA likes to refer to the “executor’s year”, implying that it should take a year or so to clear the estate and distribute the assets. In many cases it may take longer.

Elimination of Benefits to Testamentary Trusts

Now that we have our terms of reference, the first thing to note is that beginning in 2016, most testamentary trusts will no longer benefit from graduated tax rates, and they will have to switch to calendar taxation years. The only exception will be for “Qualified Disability Trusts”, which essentially is a testamentary trust with a beneficiary that qualifies for the disability tax credit.

There are no grandfathering rules. All existing testamentary trusts will have to cut off their taxation years on December 31, 2015. This could result in many trusts having two tax years in 2015. You should note that the due date for the first of these calendar taxation years will be March 30, 2016.

Furthermore, beginning in 2016, these trusts will:

  • be subject to the highest marginal tax rates
  • will have to make quarterly tax instalments
  • will lose the $40,000 alternative minimum tax exemption
  • will lose the ability to object to an assessment within one year (i.e. the 90 day deadline will apply)
  • will lose the ability to transfer investment tax credits to its beneficiaries
  • will lose the right to apply for a refund after the normal reassessment period
  • may become subject to part XII.2 tax on certain types of income where non-resident beneficiaries exist

Graduated Rate Estates

On the other hand, estates may continue to benefit from graduated rates and off-calendar fiscal years, under certain conditions. Estates that meet the requirements will be known as “Graduated Rate Estates” (“GRE”).

A GRE will qualify only under the following conditions:

  • no more than 36 months have passed since the death of the individual
  • the estate otherwise meets the definition of a “Testamentary Trust” under the law
  • the estate designates itself as a GRE in its tax return for the first taxation year ending after 2015
  • the deceased individual’s social insurance number is provided in the tax return
  • no other estate is designated as the GRE with respect to that individual.

Once 36 months has expired, the estate will no longer be a GRE and will become subject to the less favourable rules described above.

Charitable Donations by a GRE

Currently, a charitable gift made by an estate that was designated by the will of an individual is deemed to have been made by the deceased, and is not deductible within the estate.

Beginning in 2016, a GRE will benefit from new and more flexible rules regarding the claiming of charitable donations. If the estate is a GRE, then such donations may be claimed by:

  • the deceased in the year of death or the preceding year
  • the estate in the year in which the donation is made, or
  • the estate in an earlier taxation year or subsequent 5 years.

Other Changes

Other more complex changes regarding testamentary trusts are coming into effect as well, but a detailed description of these is beyond the scope of this short summary. Briefly, the election to pay tax within a trust, notwithstanding that income is paid to beneficiaries, will be virtually eliminated, unless certain conditions apply.

Finally, for testamentary life interest trusts, such as spousal trusts, upon the death of the beneficiary, a year-end will occur, and any gains or income triggered upon death will be deemed to have been paid to the beneficiary’s estate, making it liable for the taxes on death. This may create a mismatch between the liability for taxes and the ownership of the assets in cases where trust capital is to be paid out to persons who are not beneficiaries of the deceased beneficiary’s estate. A common circumstance where this issue could become a problem is in a case such as a second marriage where children from the first marriage are to receive the capital of a spousal trust upon the death of the beneficiary spouse.

 

2015 Federal Budget Summary

Under the Auspices of the Order of Chartered Professional Accountants of Canada, I am pleased to provide a summary of 2015 Federal budget summary  / 2015 Résumé du budget fédéral. I will also place a link on the Tax Links Page, and it will remain there, along with future federal and Quebec budget summaries for future reference.