16 Oct Update on Proposed Changes to Corporate Tax Planning and Tax Reduction Strategies
(October 16, 2017) – Today, the Federal Liberal government held a press conference in Ottawa to discuss the controversial proposed tax measures that were originally proposed on July 18, 2017.
Very few details were released during the conference. Below is a recap on what was discussed:
- We will see a reduction in the Federal small business tax rate (active business income less than $500,000) from 10.5% to 10% effective January 1, 2018 and down to 9% effective January 1, 2019. In BC, this will mean the small business rate for 2018 will be 12% and 11% in 2019.
- There will be no changes to the capital gains exemption rules (the lifetime capital exemption is currently $835,716).
- The government will proceed with stopping the use of income sprinkling (paying dividends to family members who are subject to lower personal tax rates) to non-active family members.
We expect that the tax measures will be released later this week. We will keep you aware of changes as more information is released.