As a result of a recent collaboration between the Canadian Bar Association, Justice Canada, the Canada Revenue Agency and Finance Canada, two Tax Matters Toolkits have been developed. Both of the Toolkits are designed to assist with understanding the tax laws that can apply on separation or divorce, which can be complex and difficult to […]
There are a wide variety of tax and non-tax elements to be considered as part of the estate planning process for business owners, such as capital gains planning, minimizing taxes on death and the use of trusts, to name a few. Winery owners are often in a unique position because, in addition to all of the usual considerations, they may be able to take advantage of some of the “farming” provisions available in the Income Tax [...]
As part of the Minister of Finance’s effort to crack down on offshore tax evasion and aggressive tax avoidance, on January 15, 2014 the Canada Revenue Agency launched the Offshore Tax Informant Program. The program provides for informants to be paid a percentage of the tax collected by the Canada Revenue Agency as a result of the information provided. The press release and further details can be found at: news.gc.ca/web/article-en.do.
On September 23, 2013, the Canada Revenue Agency announced the prescribed interest rates for the fourth quarter. These interest rates are set by the Canada Revenue Agency every quarter for a variety of items, including interest on overdue taxes and interest on overpayments of tax, among other things.
In the 2013 Federal Budget, the Department of Finance announced that it was going to consult with the public on proposed changes to the Income Tax Act regarding the taxation of certain trusts and estates.
British Columbia’s Probate Fee Act sets out the rules for the rate of probate fees payable on a deceased estate and when they must be paid. As a general rule, probate fees are equal to approximately 1.4% of the gross value of a deceased’s estate, calculated as of the date of death, and must be paid before the Court will issue a Grant of Probate. There are some circumstances, however, which reduce the amount of probate fees [...]
One of the quandaries many people face when making an estate plan is what to do with the family cottage or vacation property. The family cottage is often a beloved family asset – a place where several generations have shared many happy memories – and there is often a strong wish to keep the cottage in the family. The best way to accomplish this is one of the more challenging issues in estate planning.
In a recent Legal Alert article, I wrote about the exemption from property transfer tax when a family farm is transferred. One of the potential problems with claiming this exemption is that it is more difficult to claim the family farm exemption upon a person’s death than it is if that person transferred the property during his/her lifetime. An expansion of this exemption was announced as part of the 2013 British Columbia budget.
Family farms have historically received favourable tax treatment under several different taxing statutes. For policy reasons, legislators have sought to facilitate transfers of the family farm amongst family members. One such taxing statute that provides favourable tax treatment is British Columbia’s Property Transfer Tax Act.
The Ministry of Social Development has announced some changes to the legislation that applies to individuals receiving income assistance under the Employment and Assistance for Persons with Disabilities Act. These changes are intended to come into effect on October 1, 2012. One of the key changes to the legislation is the amount that a Person […]
Last month, the Supreme Court of Canada released its decision in Garron Family Trust v. The Queen (also known as St. Michael Trust Corp. or the Fundy Settlement). The Supreme Court of Canada upheld the decisions of both the Tax Court of Canada and the Federal Court of Appeal that held the residency of the trust is to be determined on the basis of where “its real business is carried on.” Or, in other words, the residency of a [...]
With the strong Canadian dollar and attractively low real estate prices in the US, more and more Canadians are purchasing real estate in the US. Some of the considerations prior to doing so should be the tax implications and whether or not ownership should be through a Canadian trust.
A Mortgage Investment Corporation, commonly referred to as a “MIC,” is given preferential tax treatment under the Income Tax Act. MICs appear to be quite popular with investors. They often generate a reasonably good rate of return and also are taxed favourably.
When a person resident in Canada dies, the Income Tax Act deems that person to have disposed of and reacquired all of his or her property for fair market value immediately before death. The result of this deemed disposition and reacquisition is that the person (subject to some exceptions) will be required to pay tax on the increase in value of his or her property that accrued since he or she initially purchased such property. The [...]
In Canada, a common way of owning property is in joint tenancy. Frequently, a husband and wife will own real estate, such as a home, in joint tenancy. In the right circumstances, such ownership can be an excellent estate planning strategy: on the death of the first spouse, the property transfers automatically to the second spouse without triggering any income tax, property transfer tax or probate fees. However, if the property is located in [...]
Everyone should have an estate plan, including a Will. Your estate plan disposes of all of your worldly possessions and is your last means of providing for your loved ones. Having a good, well thought-out estate plan becomes even more important when one of your beneficiaries is living with a disability.
In British Columbia, a deceased’s will must be submitted for probate in order for the executor of the estate to properly deal with and transfer certain assets of the estate. Probate fees become payable once the estate is probated. One strategy that is available in some circumstances to reduce the probate fees payable is the use of multiple wills.
Operating a business through a corporation is a long-standing and acceptable form of protecting individuals from claims of creditors of the business. Likewise, holding high-value investment assets (such as real estate or a stock portfolio) in a separate holding is a legitimate way to protect the value of those investments from future creditors of an operating company. But, as was demonstrated by the British Columbia Court of Appeal in [...]