Tax Issues

Total 356 Posts

Occupation of the Principal Residence held in an Alter Ego Trust

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The CRA was asked whether the fact that the spouse of the settlor/beneficiary of an alter ego trust inhabits the principal residence of the trust would taint the trust for the purpose of subparagraph 73(1.01)(c)(ii) of the Income Tax Act (“subparagraph 73(1.01)(c)(ii)”). The CRA’s response was favourable. It explained that this is a question of law and fact. However, as long as the terms of the trust satisfy the conditions….

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Tax Issues, Trusts, Wills

Joint accounts – the good and the bad

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Earlier this year, my father-in- law left us suddenly.  While my in-laws were careful about planning for this day there was still some Estate Administration Tax (EAT) to be paid on the transfer of assets between spouses.  Armed with that experience, my mother-in-law is determined pay the least amount of EAT and asked about the use of joint accounts. Jointly held property with a spouse or with one or more….

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Estate Planning, Executors, Family Conflict, Probate Tax, Tax Issues

Contributor/settlor Taxable Income and T3 Reporting Requirements

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As most trust and tax practitioners know, The Income Tax Act (“ITA”) will attribute trust income, losses, capital gains and capital losses to the contributor / settlor if certain conditions are met. The 2016 T3 Guide states the following: Certain related amounts, including taxable capital gains and allowable capital losses from that property or the substituted property, are considered to belong to the contributor during the contributor’s life or existence….

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Canada Revenue Agency, Estate Administration, Tax Issues, Trusts, Uncategorized

55(2) and Pipeline Planning

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The Canada Revenue Agency (CRA) was asked to comment on the application of subsection 55(2) of the Income Tax Act to a hypothetical pipeline plan implemented on or after the date of death.  Their answer was both comforting and not surprising. When engaged, subsection 55(2) has the effect of converting a tax-free dividend received by a private company to proceeds of disposition for capital gain purposes – in other words,….

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Canada Revenue Agency, Estate Planning, Executors, Tax Issues

Individual Pension Plans Revisited

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A fellow blogger wrote very eloquently late last week about succession planning for family owned businesses. Regrettably, as she noted the statistics for the successful transfer of family businesses are not very good. With the introduction of the new tax proposals, the challenge for a successful transfer of business to the next generation has become even greater. One important aspect of succession planning is for the current owner/operator to be….

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Business Succession Planning, Canada Revenue Agency, Estate Planning, Small Business, Succession Planning, Tax Issues, Uncategorized

Succession Planning

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In this blog I’d like to remind readers that the idea of “keeping it in the family” is still the most common response business owners provide when asked what they would like to see happen to their business after they have passed away. In fact, many business owners initially think that they will pass the business onto the next generation, usually their children.  Having been involved in this discussion often,….

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Business Succession Planning, Tax Issues
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