Planners tell Flaherty to fix tax proposals

In August the Department of Finance released legislative proposals to modernize the life insurance policy tax exemption test. STEP Canada has issued a comment letter that takes issue with several of the proposals’ requirements, and in particular the new Tax Avoidance Policy (TAP) rules.

Read: “Don’t go to jail for your clients”: STEP

“Faced with the possibility of losing tax exempt status, and no viable or cost-effective method of challenging the TAP determination on a pre-emptive basis, a policy owner may be left with no choice except to cancel coverage, which could be catastrophic if the insured is no longer insurable and the coverage cannot be replaced,” the letter warns.

Read the rest here.

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Tax avoidance can damage your reputation: STEP chief