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.
If you have any questions about how this impacts you or your business, please call us at 604.639.0909, or send us an email.