Usually tax laws apply to everyone. However, in 2017, the Federal Government introduced a special tax on dividends that treats family-owned private businesses that provide services more harshly than other businesses that sell goods.
We all know that we have to pay taxes. Taxes are important and provide the funds for many of our social programs that we hold dearly. But what if you get on the wrong side of the Canada Revenue Agency. Will you be treated fairly?
A not-for-profit organization in Canada that wishes to incorporate can choose to incorporate provincially/territorially (under the legislation of a specific province or territory), or federally (under Canadian federal legislation). There are reasons to choose one form over another and we will discuss those benefits in a later article. In this article, we will focus on […]
The door has opened a bit more for taxpayers to hold Canada Revenue Agency (“CRA”) and its agents accountable for the mistreatment of taxpayers. In Leroux v CRA, 2014 BCSC 720, a recent case of the British Columbia Supreme Court emerging from the Prince George registry, Mr. Irvin Leroux took on the CRA in an […]
For the purposes of determining tax liability, taxpayers are categorized into two groups: residents (of Canada) and non-residents (of Canada). Generally, taxpayers who are Canadian residents are subject to tax on all worldwide income; however, taxpayers who are not Canadian residents are generally only subject to tax on income tied to Canadian sources.1 Therefore a […]
Under the Income Tax Act (the "ITA") of Canada, Canadian residents are subject to income tax on all worldwide income. On the other hand, non-residents are only subject to tax on income tied to Canadian sources. Although this may sound straightforward, determining your liability and extent of liability can be complicated and the consequences for failing to comply can be significant. Here is a list of some important considerations:
If you are self-employed or a professional or you own a business, you are probably already doing tax planning each year to minimize the tax you pay. Let’s see what is the best thing to do in British Columbia, Canada. Even though no changes were included in the February 11, 2014 Federal Budget or the February 18, 2014 B.C. Budget, the previous changes announced in the February 19, 2013 B.C. Budget and the March 21, 2013 Federal Budget [...]
Tax rates are going up, but there is some good news!The recent BC Government Budget on February 19, 2013 and the Federal Government Budget on March 21, 2013 weren’t particularly pleasant when it comes to tax rates. The tax rates for dividends are going up substantially and in BC we will have a new higher tax bracket of 45.8% for individuals who earn more than $150,000 per year.
There are many types of income splitting strategies which are used in Canada. All of them are based on the fact that in Canada each person is taxed separately. As a result, there are significant tax savings where income is divided among family members. It works particularly well with children who are 18 years old or older and are full-time students. It is possible to put together a strategy where your children’s tuition [...]
A family trust is an excellent tool to minimize taxes through income splitting. It is particularly useful for parents who want to provide financial support for their children’s post-secondary education expenses.A family trust can be used by business owners, professionals and self-employed persons to save taxes through income splitting with family members. To use a family trust in this fashion, you need to operate your [...]
Most successful family-owned small to medium sized businesses will run reasonably well and will continue to be reasonably profitable as long as the founder is directly involved. However, very few businesses thrive or even survive after the death of the founder. Yet most business owners ignore this reality and fail to develop effective and realistic business succession plans.Most of my practice involves advising business owners. [...]
In light of recent happenings in the United States, tax amnesty programs have been receiving considerable media attention. On August 19, 2009, the United States Internal Revenue Service (the “IRS”) and the United States Department of Justice reached a settlement with the Swiss Confederation. Pursuant to the settlement the IRS will receive from UBS, Switzerland’s largest bank, information regarding approximately [...]
INTRODUCTION The combination of life insurance and testamentary trusts provides an excellent estate planning strategy. Satisfies many of the estate planning objectives of our clients. Very flexible: trusts can be personalized to suit virtually all client needs. Very reasonable cost: if death benefit is more than $100,000, the tax savings should easily justify the cost. […]