Gabriel Baron, Tax Partner, EY’s Private Client ServicesFocus: Tax Planning

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Top of show chat (for newsletter)

Today is the best day to start tax planning for the upcoming year by focusing on both what has changed, and what hasn’t changed, especially in light of the recent federal budget.

What didn’t change in the budget:

  • No change to capital gains inclusion rate, which is still 50%
  • No change to taxation of employee stock options
  • No change to the taxation employee private health benefits
  • No curtailing of tax-deferred plans such as the TFSA, RESP or RRSP

What did change in the budget:

The government announced it will review and ultimately undertake a reform of private company tax planning. Some of the tax planning to be addressed by the whitepaper include:

  • A review of allowable forms of income and gains splitting,
  • Withdrawing funds from companies at capital gains tax rates, and
  • A review of using companies to defer personal tax and reinvest the funds in passive investments

However, no changes have been announced yet, so in the meantime, have a conversation with both tax and financial advisors to understand what tax benefits you currently use and how you might be impacted if some of the rules change.

Tax time is more than just preparing a return by April 30 and shelving it until next year. While that’s critically important, filing the return is a compliance exercise that repeats what has already happened. Tax planning, on the other hand, is about reflecting on not just where you’ve been, but also where you are now, and where you want to go in the future.

Resources are available for tax preparation and planning, including EY’s Managing Your Personal Taxes guide.