The tax and small business accountants Ribeyre Chang Haylock prides itself on being pro-active and forward thinking.
In late July, the federal government issued a consultation paper targeting tax planning using private corporations. We were warned to expect this as part of the 2017 Federal Budget.
There are three items that they are working to constrain that affect our existing clients. These strategies generated considerable savings for many years and now must be modified in order to satisfy the new rules:
1. Income splitting via dividends,
2. Multiplication of the capital gains exemption and
3. Holding passive investments in a private corporation.
On October 2, 2017, the government will end the consultation process, amend legislation as they wish and, make the laws effective January 1, 2018.
Draft legislation has already been prepared for Item 1 and Item 2. Item 3 will happen but the government is being more indecisive as to the way they will do it.
While the legislation hasn’t passed yet and may be modified, we have to prepare for these changes and ensure that our clients have planned effectively for 2017 and have prepared for the new rules in 2018.
We typically update our tax planning work at the same time we do slip preparation in the early part of the new calendar year. To make full use of your last year under the old rules, Additional tax planning should be done now. Also, several of the transition provisions and alternate strategies available may apply to you and will require advance work in late 2017 in order to give you the greatest benefit.
Please see our summary document HERE
This is an excellent opportunity to have a comprehensive business review done with fresh, forward-looking ideas that will find efficiencies, save money, and insulate you from risk.
If you would like to meet with one of our partners regarding this or any other accounting or tax matter, we are happy to be of assistance.