Tax proposal summary: what’s in, what’s out

If you’re unclear on changes to Finance’s tax proposals for business, that might be because the changes were announced at three different times this week, with full details yet to be fleshed out.

For example, the government says it will simplify the proposals for income sprinkling, referring to the reasonability test for family members’ contribution to the business.

That means only a small number of businesses that pay “obviously” unreasonable amounts to family members with no active contribution to the business will be targeted, says Dave Walsh, tax service line leader for BDO Canada.

For passive investments, clients should wait to act until draft legislation comes out with Budget 2018, suggests Ryan Ball, tax partner with EY Canada’s Private Client Services.

And, though proposals were dropped for surplus stripping, “that doesn’t mean other changes won’t be announced in the future,” says Ball, referring to those specific proposals.

Here’s a summary of the changes.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.