This week, the Department of Finance has released a discussion paper on the use of private corporations for tax planning.
The Department is inviting public comments until October 2, 2017, with a planned implementation of most of the proposed tax changes in early 2018.
The proposed measures would mean significant changes to four areas:
- Splitting income with family members.
- Limiting multiplication of claims of the lifetime capital gains exemption.
- Converting a private corporation’s regular income into capital gains.
- Holding passive investments inside a private corporation.
We know many of our clients would be impacted by these changes and while it is early days in the process, we want to assure you that we are actively engaged with DFK Canada, our nationwide affiliate of member accounting firms, in developing responses aimed at protecting our small business clients.
KMSS staff members are currently studying the proposals which can be found here: http://www.fin.gc.ca/n17/17-066-eng.asp
If you have any questions concerning the above, please do not hesitate to contact us.