Update on Measures Proposed by Federal Government to Abolish Certain Tax Planning Using Private Corporations, Tax Reductions Announced for SMEs and Other Measures
On October 16, 2017, the federal government issued a release in which it signaled its intention to simplify the measures proposed on July 18, 2017 to counter family income splitting. Furthermore, the government confirms that it will not be adopting the measures proposed for restricting access to the lifetime capital gains exemption (LCGE). In a new release issued October 19, 2017, the Finance Minister of Canada added that the measures relating to the conversion of income into capital gains will not be implemented. Concurrently with these announcements, the government communicated its intention to reduce the tax rate for SMEs as of 2018.
Lastly, in its October 24, 2017 Economic Statement, the federal government reiterated all of the recent days announcements, adding two measures for families and low-income individuals, i.e. indexation of the Canada Child Benefit as of 2018 and enhancement of the Working Income Tax Benefit.
Here is a brief summary of the tax measures announced by the federal government since October 16, 2017.