Proposed Federal Measures: Tax Planning Strategies Using Private Corporations

- July 24, 2017

As most of us are still waiting for summer to truly arrive, the federal government unleashed a storm of controversy on July 18th when it tabled a number of legislative proposals and a consultation document titled “Tax Planning Using Private Corporations”.

While the federal government’s intention to address tax planning strategies involving private corporations that can result in high-income individuals obtaining tax benefits not available to other individuals had been announced in its 2017 budget, the documents tabled are far more extensive.

The documents propose legislative changes that include a number of measures that would be applicable as of July 18, 2017 and several matters for more widespread consultation. The proposed amendments relate to:

  • Income splitting;
  • The lifetime capital gains exemption;
  • Tax on passive income;
  • Compensation by way of capital gains.

The consultation period ends on October 2, 2017.

Attached Tax News includes a summary of the proposed measures. As Québec’s largest firm of chartered professional accounts with the most extensive network of tax specialists in the province, Raymond Chabot Grant Thornton has already begun and will continue its in-depth analysis of the proposed changes.

How will these changes impact you?

The proposed changes could significantly impact your corporate and tax structure. However, at this time, we cannot provide a definitive recommendation on the approach you should adopt. Rest assured though that your Raymond Chabot Grant Thornton advisors have your interests at heart.

Most of the proposed changes will only come into effect in 2018 and they could change in the coming months in response to comments from tax industry specialists.

Our experts are working proactively to influence the final outcome and are continually seeking innovative strategies to address the changes within legal parameters and in your greatest interest.

Any change is an opportunity to take a step back and review your overall situation and structure your affaires to minimize your tax burden within the limitations of tax legislation.

We can assure you we are already on the ground and will be ready to react quickly.

Thank you for your trust and enjoy the summer.

Download the pdf

Comment on this article