Personal Finance

Income-sprinkling to end in Jan. 2018? Any details of the proposed tax changes?

  • Last Updated:
  • Dec 8th, 2017 10:13 am
[OP]
Newbie
Jul 15, 2013
92 posts
27 upvotes

Income-sprinkling to end in Jan. 2018? Any details of the proposed tax changes?

It is extremely frustrating that our Finance Minister insists on implementing his small business tax changes for Jan. 1st 2018, with no details whatsoever. I could not find any information online concerning the proposed tax legislation that is reportedly to start in less than ONE MONTH! Does anyone know what will happen to income-sprinkling? Is 2017 the last year we can do it??? I called my accountant and he said it most likely won't happen..

My personal situation: if income splitting is effectively outlawed starting Jan. 1st 2018, then I need to change my whole corporate tax planning for 2017 and 2018! In my opinion, it is completely unreasonable to be given such short notice (there's only 3 weeks left before 2018). At the very least, push it to 2019!

In one of the articles I found, "The CFIB is concerned that the government's plan effectively means it will be introducing legislation later in 2018 that will be RETROACTIVE to Jan. 1." (Unbelievable...)

Here are some recent articles I found, all sharing my frustration:
https://www.theglobeandmail.com/news/po ... e37184876/
http://torontosun.com/opinion/columnist ... ax-changes
https://www.thestar.com/news/canada/201 ... anges.html
5 replies
Deal Addict
Oct 7, 2007
3133 posts
724 upvotes
keepathomas wrote:
Dec 7th, 2017 4:03 pm
It is extremely frustrating that our Finance Minister insists on implementing his small business tax changes for Jan. 1st 2018, with no details whatsoever. I could not find any information online concerning the proposed tax legislation that is reportedly to start in less than ONE MONTH! Does anyone know what will happen to income-sprinkling? Is 2017 the last year we can do it??? I called my accountant and he said it most likely won't happen..

My personal situation: if income splitting is effectively outlawed starting Jan. 1st 2018, then I need to change my whole corporate tax planning for 2017 and 2018! In my opinion, it is completely unreasonable to be given such short notice (there's only 3 weeks left before 2018). At the very least, push it to 2019!

In one of the articles I found, "The CFIB is concerned that the government's plan effectively means it will be introducing legislation later in 2018 that will be RETROACTIVE to Jan. 1." (Unbelievable...)

Here are some recent articles I found, all sharing my frustration:
https://www.theglobeandmail.com/news/po ... e37184876/
http://torontosun.com/opinion/columnist ... ax-changes
https://www.thestar.com/news/canada/201 ... anges.html
Totally agree with you. I have never seen something so complex handled so poorly. Please vote responsibly in the next election. I don't know who you voted for last time but the only way we are literally going to save our country is to make sure these aren't the people leading it. I have never seen such a terrible series of policies and decisions executed in such a short period of time. I am really concerned about our future as a country.
Sr. Member
May 12, 2014
916 posts
374 upvotes
Montreal
choclover wrote:
Dec 7th, 2017 4:29 pm
I have never seen such a terrible series of policies and decisions executed in such a short period of time.
You have to admit that it's impressive how much damage he's been able to inflict on the country's finances in such a short time.

For example:
The recent changes to the Indian act will cost hundreds of millions more every year than originally planned
https://www.google.ca/amp/nationalpost. ... e-cost/amp

But that's such small potatoes with this government that it barely made a headline in the news.
Deal Addict
Jan 20, 2016
1433 posts
554 upvotes
Houston, TX
keepathomas wrote:
Dec 7th, 2017 4:03 pm

In one of the articles I found, "The CFIB is concerned that the government's plan effectively means it will be introducing legislation later in 2018 that will be RETROACTIVE to Jan. 1." (Unbelievable...)

Never underestimate the power of Liberal's greed and ignorance.

They retroactive changes to income tax just happened a year ago ...
Make the Trudeau drama teacher again!
[OP]
Newbie
Jul 15, 2013
92 posts
27 upvotes
asa1973 wrote:
Dec 8th, 2017 9:34 am
Never underestimate the power of Liberal's greed and ignorance.

They retroactive changes to income tax just happened a year ago ...
Say whaat?!! What changes were retroactive a year ago?!
Deal Addict
Jan 20, 2016
1433 posts
554 upvotes
Houston, TX
keepathomas wrote:
Dec 8th, 2017 10:02 am
Say whaat?!! What changes were retroactive a year ago?!
2016 budget was filed in March 2016 but changes was applied from 01.01.2016, payroll software have to be changed on the fly (changed tax brackets and some other things).
note the date

Mar 23, 2016
https://www.osler.com/en/resources/regu ... efing-2016
Budget 2016 proposes a number of further amendments to reflect the new top marginal income tax rate for individuals, including:

amending the definition of “relevant tax factor” in the foreign affiliate rules to reduce the relevant tax factor for individuals from the current 2.2 to 1.9;
amending the capital gains refund mechanism for mutual fund trusts to reflect the new 33% rate in the formulas that are used in computing refundable tax;
increasing the Part XII.2 tax rate on the distributed income of certain trusts from 36% to 40%;
increasing from 28% to 33% the tax rate on personal services business income earned by corporations;
providing a 33% charitable donation tax credit (on donations over $200) to trusts that are subject to the 33% rate on all of their taxable income;
applying the new 33% rate on excess employee profit sharing plan contributions; and
amending the recovery tax rule for qualified disability trusts to refer to the new 33% rate.
Make the Trudeau drama teacher again!

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