• Last Updated:
  • Sep 12th, 2017 2:47 pm
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[OP]
Jr. Member
May 20, 2002
158 posts
18 upvotes

Investing passive income

My situation is that I have a holdco that holds active income from opco.

My question is in relation to the proposed "grandfathering" of passive income in an holding company. Currently I am investing 15k per month into passively managed investment. Would it make sense to invest another 100k before the October 2nd consultant cutoff?

Thanks in advance, Kevin
Last edited by CowDoc on Sep 10th, 2017 7:45 pm, edited 1 time in total.
6 replies
[OP]
Jr. Member
May 20, 2002
158 posts
18 upvotes
Good point. I would guess market timing would be one.
Newbie
Mar 16, 2014
23 posts
3 upvotes
Toronto
AFAIK Mornaeu has not explicitly stated when the grandfathering for passive investment will take place, it certainly could be July 18th, it could at time of next announcement, it could be until Dec 31, or maybe they will come back with some different proposal altogether
Deal Addict
Aug 28, 2007
1806 posts
223 upvotes
Calgary
I agree with tdiddy23. AFAIK, of the three items under consideration( sprinkling, capital gains and passive income) only the first two have associated possible proposed actions. (see the CBC article and read third last paragraph.) They aren't sure how they will close this loophole because each case requires a set of eyes to make a very complicated judgement... read "increased cost to CRA due to hiring & training lots of new CRA staffers to review your circumstances". From the government perspective, they always need to balance the optics of "being seen to be fair" to the proletariat with how much new cash do they actually net from the process.

You may be tucking away $15K/mo in an investment for your retirement while I may be doing it so I can meet my payroll in the next recession. How and Who is going to make the decision that one of us should be taxed differently?

And besides, even when the worst comes to pass there are legions of very sharp accountants and lawyers already developing the strategies that you and I will use to stay ahead of the tax man. The CRA is always playing catch-up in a whack-a-mole game.
Deal Addict
Oct 7, 2007
3017 posts
672 upvotes
I listened to a seminar being given by some experts in tax and they recommended avoiding any tax planning until the government actually commits to what they are doing. At this point, everything is really vague and any actions you take because of it may not be wise.
[OP]
Jr. Member
May 20, 2002
158 posts
18 upvotes
I tend to agree with tdiddy23. I don't know what would be the downside. Any gains would be minimal if they change the rules to not allow it. But if it is allowed then I have another 90k invested

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