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Proposed measures – tax planning using private corporations

In the latest Federal Budget, pronounced on March 22th 2017, Finance Minister Bill Morneau announced that there will be changes in the taxation of private corporations. On July 18th, 2017, the Department of Finance has published a draft legislation that will change the landscape of Canadian private corporations. If these proposals are enacted as drafted, these changes will modify current and future tax planning in regards of corporate structure and planned remuneration of Canadian entrepreneurs and their families.

The draft legislation focuses on three different issues:
1) Income sprinkling using private corporations
2) Holding a passive investment portfolio inside a private corporation
3) Converting a private corporation’s income into capital gains.

For each of the issues described in Finances Canada draft legislation, a description of the situation with the proposed modifications will be discussed below.

 

READ MORE  › SLF TaxNews ProposedIncome_Eng

 

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