Sole proprietorships vs. corporations
|
|
- Angelina Gordon
- 5 years ago
- Views:
Transcription
1 Sole proprietorships vs. corporations If you are a sole proprietor, you may wonder when or if you should incorporate your business. Not surprisingly, the answer depends on your unique circumstances. A number of factors related to both you and your business need to be examined. These include profit expectations, expansion plans, your marginal tax rate and how much income you need. Also relevant is whether your family members plan to work or invest in the company. Business structures and business income (loss) The Canada Revenue Agency (CRA) defines a business as an activity where there is a reasonable expectation of profit and where there is evidence to support that intention. 1 This would include a profession, a trade, or a manufacturing operation. For income tax purposes, the net business income (or loss) is calculated by totaling the income from the business and deducting eligible expenses. Income would include revenue from the sale of goods or the provision of services. Many expenses that are deductible for accounting purposes may also be deducted when calculating taxable income. Sole proprietorship A major advantage of most sole proprietorships is lower costs. A sole proprietor does not have to bear the burden of government registration fees, shareholder meetings and preparation of corporate tax 1 returns, which together can add up to thousands of dollars a year. As well, there is minimal regulation and decision-making is generally easier. Some of the strategies available to sole proprietorships include 1. Maximize use of loss carryovers. It may make good sense to maintain the status quo as a sole proprietor for the start-up period if losses are expected especially if the owner has other income. As the owner and business are not separate entities, losses from the business may be applied against the owner's other income (employment, investment, rental, etc.) to reduce overall taxes payable. Losses from the business that cannot be used in the current year may be claimed retroactively for three years or forward up to 20 years. The carry-forward option is especially beneficial if the taxpayer expects to be in a higher tax bracket in the coming years. For losses to be deductible, the CRA will require that the business is conducted in a commercial manner in the pursuit of profit. 2. Pay family members. Proprietors can pay their spouses or other family members a reasonable salary for work they have done to support the business. This could augment losses that may be applied against the business owner's other income or reduce income taxable to the owner, as well as provide the opportunity to take advantage of lower tax brackets of family members, if applicable.
2 3. Consider incorporation once profitable. It may be beneficial to incorporate the business, once profitable, using a tax-free rollover of assets. Assets of the business can be transferred to a corporation at tax cost in exchange for shares of the corporation without any immediate tax consequences, providing certain criteria are met (regarding the nature of the property being transferred and the characteristics of the corporation). Owners should seek legal and tax advice before undertaking this type of transaction. Partnership In a partnership, two or more parties (such as individuals or corporations) join together to carry on a business. Each partner is entitled to a share of the business profits. Net business income is calculated at the partnership level and is allocated to the partners in accordance with the partnership agreement. The partners report their share of the business income as they otherwise would. For example, an individual partner includes the business income and expense items on a personal tax return, while a corporate partner reports these on a corporate tax return. Keeping it separate Since a small business is owned personally, whether by a sole proprietor or an ownermanager of a corporation or by a partnership, business and personal expenses may become comingled. For example, a business owner may find it easier to deposit cheques from clients to a personal bank account, or to charge business expenses to a personal credit card. It is important to clearly define which charges are for business purposes, since these can be deducted on a tax return, and which charges are non-deductible personal expenses. One of the easiest ways to distinguish business from personal expenses is to have two separate bank accounts: a personal account and a business banking account. It s also a good idea to have two credit cards, one for personal spending and the other for business use. Most people automatically open separate bank and credit accounts for a corporation since it has its own legal identity. It is just as important for sole proprietors to separate their accounts, although many overlook this essential step. Having a separate bank account and credit card for any business will make tax time a lot easier when it comes to separating business and personal expenses and can also come in handy in the case of a CRA business expense audit down the road. Incorporated business While complexity increases with incorporation, owner-shareholders can enjoy significant benefits over sole proprietors. One advantage is limited liability for the debts of the business shareholders can only lose what they invest in the company. There could be liability on Corporate directors, in some circumstances. If the corporation were to be sued, creditors could only go after the resources and assets of the corporation. In contrast, sole proprietors have unlimited liability for the debts of the business since owners and their businesses are not considered separate entities. Note that if the shareholder of an incorporated business provided a personal guarantee e.g., for a bank loan the asset pledged as security (or the owner's other personal assets, if a general guarantee is provided) would be at risk if the loan were to go into default.
3 Incorporation can also facilitate: The ability to divide and transfer ownership of the business Eligibility for certain provincial tax incentives or holidays The potential continuation of the business after the retirement or death of a shareholder Additional benefits and strategies available to corporations 1. Qualify for the small business deduction. In 2015, the first $500,000 of active business income of a Qualified Small Business Corporation (QSBC) attracts a federal tax rate of 11%. All provinces have reduced tax rates for the first $400,000- $500,000 of small business income so that the combined federal and provincial tax burden ranges from 11% to 19% of income under the small business income threshold. The remainder is taxed at combined rates ranging from about 25% to 31%. While personal tax will also be paid by the shareholder when the after-tax income is distributed, the personal tax can be deferred by delaying payment of salary or dividends if the shareholder does not immediately need the funds. Sole proprietors and partners, on the other hand, are taxed at individual marginal tax rates on any income received. 2. Find the optimal remuneration mix. Corporations have the flexibility to issue dividends, salaries, bonuses, stock options or share plans, or to repay loans or capital to shareholders who have provided capital to the business. The optimal remuneration mix for a shareholder/employee will depend on many factors, including the shareholder/employee s marginal tax rate, the shareholder/employee s cash flow requirements, the corporation s tax rate, provincial health and/or payroll taxes, the desire to maximize RRSP contribution room, CPP contributions, and the need to reduce the shareholder/employee s alternative minimum tax exposure. 3. Use the $813,600 2 lifetime capital gains exemption Capital gains on the sale of shares of a QSBC may qualify for the $813,600 Lifetime Capital Gains Exemption (LCGE). The LCGE can be used to reduce taxes when individuals sell their QSBC shares to third parties or family members, or in the event of their deaths. 4. Multiply the $813,600² LCGE. With proper planning, the LCGE may be used by each family member who is a shareholder. This could be accomplished by having family members buy shares at the inception of the business with their own money, or through an estate freeze, whereby the family members acquire common shares for a nominal amount. Tax experts must be consulted to ensure such transactions are properly undertaken. 5. Income split. If your spouse and adult children are shareholders in the corporation and their shares were acquired for fair market value, any dividends they receive will be taxed in their hands. Your corporation can also employ your family members as long as the amount paid is reasonable for the work performed. Note that most opportunities for ownershareholders to income-split with minors have been eliminated. 6. Pay a retiring allowance. Allowances paid upon retirement to salaried employees, including a shareholder, may be transferred into an RRSP on a tax-free 2 This amount is for the 2015 Canadian Tax return and indexed to inflation, using the Consumer Price Index data as reported by Statistics Canada.
4 rollover basis in some circumstances. Since the ability to roll over a retiring allowance to an RRSP only applies to employment periods prior to 1996, a retiring allowance has little benefit for employees of newer companies. Proprietors and partners cannot roll over a retiring allowance to an RRSP. 7. Continuation of the business at retirement or death. Since a corporation is considered a separate entity, it continues after the death or retirement of its shareholders. Owner-shareholders can pass the shares in the business to family members or others during their lifetimes or through their wills. This is another advantage of a corporation over a sole proprietorship, which terminates when the owner retires or dies. The ownershareholder can sell their shares as a going concern and receive a lump sum and/or a vendor take-back loan. With a family business, the owner may want to retain shares to supplement retirement income. A sole proprietor or executor for a sole proprietor, on the other hand, may sell or transfer only the assets of the business on retirement or death. A potential pitfall in incorporating a small business If a person terminates their employment with their company, incorporates a business and then their former employer hires them back as a consultant, they may think they will be able to enjoy all the advantages of incorporation, including lower corporate tax rates and the ability to income split. This is not necessarily so. The federal government discourages this kind of move through a number of restrictions that apply to what it calls a "personal services business." It considers a corporation to be conducting a personal services business if its shareholders or related persons provide services that would be considered services of an employee in the absence of the corporation. Among the restrictions: 1. Income from a personal services business is not considered active business income. As a result, it does not qualify for the small business deduction and is taxed at the general corporate rate. 2. The government generally limits the expenses that are deductible in calculating the income of a personal services business to salary, other benefits paid to the "incorporated employee," and certain expenses that would normally be deductible by an incorporated employee in selling property or negotiating contracts. 3. Remuneration paid to individuals other than the incorporated employee is not deductible by the corporation. 4. There is no advantage to accruing bonuses on behalf of the incorporated employee, since remuneration is only deductible in the corporation when paid. 5. There is currently generally no tax deferral advantage of retaining income in a corporation carrying on a personal services business. Generally, a corporation will not be seen to be a personal services business if it employs more than 5 full-time employees throughout the year or if the services are provided to an associated company. If you are considering quitting your job to establish an incorporated business for tax or income-splitting purposes, see a tax professional before handing in your resignation. How businesses are taxed is quite complex and these are just a few of the issues to consider. There are also other non-tax factors to think about when determining the right structure for your small business, such as legal matters.
5 Consult with the appropriate advisors, including tax and legal professionals, before starting your small business. Finally, small business owners need to know that winding up a corporation can be more complex than terminating a sole proprietorship, as it triggers both tax and non-tax costs. Tax costs may include capital gains tax on the appreciation of shares. Non-tax costs may include legal and accounting expenses. Generally, a sole proprietor who winds up a business will only pay tax on income earned during the year, plus any income tax on the disposition of business assets. Before sole proprietors incorporate their businesses, they need to weigh the pros and cons of sole proprietorship versus incorporation. They should also have an accurate picture of their overall needs and goals, and what resources are required to achieve these goals. Proposed Changes to the Lifetime Capital Gains Exemption (LCGE): The 2015 Federal budget included a proposal to increase the LCGE to $1 million from $813, for capital gains realized on the disposition of qualified farm or fishing property occurring on or after April 21, Quebec has also proposed an increase its provincial LCGE for qualifying farm and fishing property, located anywhere in Canada, from $800,000 to $1,000,000 starting in These proposals had not been enacted at the time of publication. For more information talk to a CIBC Advisor at any branch call CIBC (2422) go to This article is based on information CIBC believed to be accurate on the date shown at the bottom of the article. Banking products and services are provided by CIBC. Investment products and services are offered by CIBC Securities Inc., a whollyowned subsidiary of CIBC and a member of the Mutual Fund Dealers Association of Canada, or by CIBC Investor Services Inc., a subsidiary of CIBC, a member of the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund. CIBC and its affiliates and agents are not liable for any errors or omissions. CIBC and its affiliates and agents are not responsible for providing updated or revised information. This article is intended to provide general information only and should not be construed as specific advice suitable for individuals. Since a consideration of individual circumstances and current events is critical, anyone wishing to act on information in this article should consult his/her CIBC Advisor. Certain articles may discuss tax, legal or insurance matters. For advice on your specific circumstances, please consult a tax, legal or insurance professional. Any references in this article to Canadian tax matters are based on federal tax laws only, unless otherwise stated. Provincial tax laws may also apply and may differ from federal tax laws.
What is incorporation?
The Navigator INVESTMENT, TAX AND LIFESTYLE PERSPECTIVES FROM RBC WEALTH MANAGEMENT SERVICES Professional corporations Is incorporating your professional practice right for you? Bola Wealth Management
More informationNavigator. Incorporate or not? The. Is incorporating your business right for you?
The Navigator INVESTMENT, TAX AND LIFESTYLE PERSPECTIVES FROM RBC WEALTH MANAGEMENT SERVICES Incorporate or not? Is incorporating your business right for you? Bola Wealth Management RBC Dominion Securities
More informationINCORPORATING YOUR FARM BUSINESS
INCORPORATING YOUR FARM BUSINESS If you carry on a farm business, and have significant income, transferring the farm business to a corporation may provide some benefits as there are tax planning opportunities
More informationNavigator. Incorporating your farm. The. Is it right for you? Please contact us for more information about the topics discussed in this article.
The Navigator INVESTMENT, TAX AND LIFESTYLE PERSPECTIVES FROM RBC WEALTH MANAGEMENT SERVICES Incorporating your farm Is it right for you? On July 18, 2017 the federal government released a consultation
More informationThere are several advantages to incorporating your farm. The following is a non-exhaustive list of these advantages:
RBC Wealth Management Services The Navigator Incorporating Your Farm Is it right for you? If you have considered incorporating your farm, investigate the advantages and the costs of incorporating. This
More informationINCORPORATING YOUR FARM BUSINESS
INCORPORATING YOUR FARM BUSINESS If you carry on a farm business, and have significant income, transferring the farm business to a corporation may provide some benefits as there are tax planning opportunities
More informationINCORPORATING YOUR BUSINESS
INCORPORATING YOUR BUSINESS If you carry on a business, there are many tax planning opportunities which become available to you by simply incorporating. By transferring your business to a corporation,
More informationTax Letter CAPITAL GAINS EXEMPTION AND PROPOSED CHANGES. Example
Marc Brazeau CPA, CA, Partner Tax Letter Monthly Newsletter October 2017 CAPITAL GAINS EXEMPTION AND PROPOSED CHANGES The capital gains exemption allows Canadian resident individuals to earn tax-free capital
More informationINCORPORATING YOUR BUSINESS
INCORPORATING YOUR BUSINESS If you carry on a business, there are many tax planning opportunities which become available to you by simply incorporating. By transferring your business to a corporation,
More informationTrusts An introduction
Trusts An introduction Trusts can be highly effective wealth management vehicles, especially for income splitting, tax and estate planning purposes and wealth protection. A trust is an arrangement whereby
More informationTAX NEWSLETTER. October 2017
TAX NEWSLETTER October 2017 CAPITAL GAINS EXEMPTION AND PROPOSED CHANGES EMPLOYEE LOANS (INCLUDING RECENT CHANGES TO HOME RELOCATION LOANS) TAXATION OF DIVIDENDS TRANSFERS OF PROPERTY TO TRUSTS AROUND
More informationTaking Action: Revised CCPC tax proposals What you need to know (and do) now
October 23, 2017 Taking Action: Revised CCPC tax proposals What you need to know (and do) now Debbie Pearl-Weinberg Executive Director, Tax and Estate Planning, CIBC Financial Planning and Advice Jamie
More informationIN TRUSTS WE TRUST: Tax and Estate Planning Using Inter Vivos Trusts
IN TRUSTS WE TRUST: Tax and Estate Planning Using Inter Vivos Trusts Jamie Golombek Managing Director, Tax & Estate Planning CIBC Private Wealth Management Estate planning is the process of making arrangements
More informationTaking Action: CCPC tax proposals What you need to know (and do)
September 2017 Taking Action: CCPC tax proposals What you need to know (and do) Debbie Pearl-Weinberg Executive Director, Tax and Estate Planning, CIBC Financial Planning and Advice Jamie Golombek Managing
More informationUPDATE. October Did You Know
TAX UPDATE Did You Know Davidson & Company LLP will be hosting the second seminar of the Back to School Seminar Series on November 1st at the Four Seasons Hotel: 2017 IFRS Update & Current Issues. Register
More informationTAX LETTER. August 2015
TAX LETTER August 2015 ASSOCIATED CORPORATIONS DEATH AND INCOME TAXES SALE OF BUILDING WITH TERMINAL LOSS AND LAND WITH GAIN RESERVES FOR RECEIVABLES PRESCRIBED INTEREST RATES AROUND THE COURTS ASSOCIATED
More informationUpdate on the CCPC tax proposals December 2017
Update on the CCPC tax proposals December 2017 Debbie Pearl-Weinberg Executive Director, Tax and Estate Planning, CIBC Financial Planning and Advice Jamie Golombek Managing Director, Tax & Estate Planning,
More informationOctober 2017 Tax Newsletter
FRUITMAN KATES LLP CHARTERED PROFESSIONAL ACCOUNTANTS 1055 EGLINTON AVENUE WEST TORONTO, ONTARIO M6C 2C9 TEL: 416.920.3434 FAX: 416.920.7799 www.fruitman.ca Email: info@fruitman.ca October 2017 Tax Newsletter
More informationIdeally your contribution should be made as soon as possible in the year in order to shelter the investment income from tax.
Maximize RRSP Contributions. You should make your maximum RRSP contribution while you are working. You will get a tax deduction now at your current tax rate and you will be able to take the money out later
More informationTaxation of Business Income and Methods of Withdrawing Cash from a Corporation
March 22, 2012 Taxation of Business Income and Methods of Withdrawing Cash from a Corporation Surplus Cash in a Corporation Part 3 As the owner-manager of your operating company, you may have surplus profits
More informationNewsletter PERSONAL. November 2018 Issue 46
IN THIS ISSUE The Principal Residence Exemption Life Insurance Low-Tax Bracket Family Members Testamentary Trusts RRSPs and RRIFs Shares and Partnership Interests Donations Spouse and Common-Law Partner
More informationIn assessing the benefits of incorporation the following four items represent the most significant tax benefits of incorporation:
Tax Implications of Using a Corporation This summary is intended to provide a general overview of the significant Canadian tax implications of using a corporation to carry on business. Given that the commercial
More informationINCORPORATION Is it right for you?
INCORPORATION Is it right for you? Tax Issues to Consider Before Incorporating Submitted by: Theresa Francis, CPA, CA Paul Ianni, CPA, CA Rick Elliott, CPA, CA BDO Canada LLP Linda Campbell, CPA, CA 3630
More informationThe Navigator. RBC Wealth Management Services
RBC Wealth Management Services The Navigator Selling the Farm and the Capital Gain Exemption The 2011 Census of Agriculture indicated that nearly half of all farmers in Canada are 55 years of age or older.
More informationTax Planning for Business Owners:
Tax Planning for Business Owners: 2017-18 If you make your daily bread in the business world as a self-employed person or corporate business owner, you have many opportunities to consider when it comes
More informationINCORPORATING YOUR PROFESSIONAL PRACTICE
INCORPORATING YOUR PROFESSIONAL PRACTICE REFERENCE GUIDE Most provinces and professional associations in Canada now permit professionals such as doctors, dentists, lawyers, and accountants to carry on
More informationNavigator. Withdrawing surplus cash from a corporation. The. Please contact us for more information about the topics discussed in this article.
The Navigator INVESTMENT, TAX AND LIFESTYLE PERSPECTIVES FROM RBC WEALTH MANAGEMENT SERVICES Withdrawing surplus cash from a corporation On July 18, 2017 the federal government released a consultation
More information2012 Year End Tax Planning Considerations
2012 Year End Tax Planning Considerations Tax planning is a year-round activity and a vital component of the financial planning process. Since we are approaching the end of the calendar year, it is an
More informationReference Guide TESTAMENTARY TRUSTS
Reference Guide TESTAMENTARY TRUSTS While most people have heard about trusts, many do not really know what they are or what benefits they offer and often incorrectly believe that trusts are only for wealthy
More informationThe. for HEALTHCARE INCORPORATION PROS TAX DEFERRAL 10%-17%
The PROS & CONS INCORPORATION of for HEALTHCARE PROFESSIONALS 1 INCORPORATION PROS TAX DEFERRAL 10%-17% The tax rate on income earned inside a professional corporation that is eligible for the small business
More informationIPPs: Frequently Asked Questions
RBC Dominion Securities Inc. Individual Pension Plans (IPP) IPPs: Frequently Asked Questions General IPP Questions 1 2 3 4 5 6 7 8 9 10 What is an IPP? What is a defined benefit pension plan? Who calculates
More informationDeath and Taxes It s Never Too Early To Plan. Franklin H. Famme, CPA, CA
Death and Taxes It s Never Too Early To Plan Franklin H. Famme, CPA, CA Benjamin Franklin Agenda Understanding Estates Taxes Upon Death Probate Income Tax Taxes After Death Understanding Estates Jointly-Held
More informationthan the deceased individual as a consequence of that individual s death.
RBC Wealth Management Services The Navigator Testamentary Trusts A reason to consider amending your Will It is common to distribute your assets on death outright to your loved ones. A testamentary trust
More informationRetirement and Estate Solutions Using Excess Funds in a Corporation
March 22, 2012 Retirement and Estate Solutions Using Excess Funds in a Corporation Surplus Cash in a Corporation - Part 4 As the owner-manager of your operating company, you may have surplus profits accumulating
More informationcreated by provisions in the taxpayer s Will;
The Navigator R B C W E A L T H M A N A G E M E N T S E R V I C E S The Testamentary Spousal Trust An Income Splitting Strategy In an age where people feel that they are taxed more and more every day,
More informationRetiring Right: Understanding the Taxation of Retirement Income
January 2019 Retiring Right: Understanding the Taxation of Retirement Income Jamie Golombek & Tess Francis Tax & Estate Planning, CIBC Financial Planning and Advice The question isn't at what age I want
More informationMaking the most of your TFSA dollars
TAX, RETIREMENT & ESTATE PLANNING SERVICES TAX MANAGED STRATEGY 17 Making the most of your TFSA dollars Tax Free Savings Accounts (TFSAs) can be an excellent savings vehicle, however, consideration should
More informationPersonal Income Tax. July 16, 2014
Personal Income Tax July 16, 2014 Personal Income Tax Personal income tax is an element of financial assessment, since taxation influences available resources, sources and uses of funds; Personal income
More informationCHANGES TO THE INCOME
TAX LETTER January 2018 CHANGES TO THE INCOME SPRINKLING PROPOSALS CCPC INVESTMENT INCOME STILL SOME TAX SAVINGS OPPORTUNITIES FOREIGN EXCHANGE GAINS AND LOSSES PRINCIPAL RESIDENCE EXEMPTION GRADUATED
More informationInvestment planning with couples
Investment planning with couples Couples generally plan and work together to improve their future; this may include growing their assets, managing debt and property. As part of this process, spouses may
More informationTop 10 RRSP tips Get the most from your RRSP
Top 10 RRSP tips Get the most from your RRSP Whether retirement is five years or 25 years away, the best strategy for reaching any goal is to have a plan - and these important RRSP strategies can help
More informationREFERENCE GUIDE Spousal Trusts
REFERENCE GUIDE Spousal Trusts Although this material has been compiled from sources believed to be reliable, we cannot guarantee its accuracy or completeness. All opinions expressed and data provided
More informationCanadian income tax system. For the purposes of this article, we assume you are a tax resident of Canada.
The Navigator RBC Wealth Management Services Tax planning basics This article provides an overview of the Canadian tax system, basic investments and how the two interact. By investing tax-efficiently,
More information2012 Year End Tax Tips
2012 Year End Tax Tips Jamie Golombek November 2012 It s the most wonderful time of the year! That s right, time to start your year-end tax planning so that any strategies that need to be implemented by
More information2015 Federal Budget Federal Budget s Tax Measures. RBC Wealth Management Services
RBC Wealth Management Services 2015 Federal Budget 2015 Federal Budget s Tax Measures A summary of the key tax measures that may have a direct impact on you. Federal Minister of Finance Joe Oliver delivered
More information> The Role of Insurance in Wealth Planning
> The Role of Insurance in Wealth Planning Executive retirement solutions ASSANTE ESTATE AND INSURANCE SERVICES INC. Executive retirement solutions Everyone wants enough retirement income to maintain their
More informationTAX TIPS. Audit Tax Advisory
Audit Tax Advisory TAX TIPS Crowe Soberman LLP Join our online community In this issue: Investment income 3 Facebook.com/CroweSoberman On Crowe Soberman s Facebook page, you can stay in the loop with the
More informationThe Navigator. RBC Wealth Management Services. Maximizing Your After-Tax Retirement Income
RBC Wealth Management Services The Navigator Ten Strategies to Pay Less Tax in Retirement Maximizing Your After-Tax Retirement Income Are you approaching retirement or have you recently retired? Maximizing
More informationTaxation of your RRSP/RRIF at death
The Navigator RBC Wealth Management Services Estate planning for your RRSP/RRIF Throughout your life, many opportunities and choices will arise that have financial implications both for the short and long
More informationREGISTERED RETIREMENT SAVINGS PLAN
REGISTERED RETIREMENT SAVINGS PLAN The 2014 RRSP contribution deadline is March 2, 2015 Registered Retirement Savings Plans (RRSPs) are an important financial and taxplanning vehicle to encourage retirement
More informationDEALING WITH YOUR VACATION PROPERTY
DEALING WITH YOUR VACATION PROPERTY REFERENCE GUIDE For many families, the vacation property evokes fond memories of vacations past and strong sentimental attachments. These feelings can often make it
More informationUnderstanding Passive Corporate Investment Income
Understanding Passive Corporate Investment Income UNDERSTANDING PASSIVE CORPORATE INVESTMENT INCOME Many small and medium sized business owners take advantage of the 15% small business tax rate by leaving
More informationNavigator. Alter ego and joint partner trusts. The. An estate planning strategy to protect your wealth
The Navigator RBC Wealth Management Services Weatherill Wealth Management Group Alter ego and joint partner trusts An estate planning strategy to protect your wealth Brad Weatherill, CIM Vice President
More informationTESTAMENTARY TRUSTS WHAT IS A TRUST?
TESTAMENTARY TRUSTS REFERENCE GUIDE While most people have heard about trusts, many do not really know what they are or what benefits they offer and often incorrectly believe that trusts are only for wealthy
More informationRRSPs and RRIFs on death frequently asked questions
TAX, RETIREMENT & ESTATE PLANNING SERVICES WEALTH TRANSFER STRATEGY 8 RRSPs and RRIFs on death frequently asked questions Most Canadians are familiar with the tax advantages of using registered savings
More informationUnderstanding Personal Holding Companies
BMO Nesbitt Burns Understanding Personal Holding Companies Many individuals hold investment portfolios in a personal holding company. It`s important for these investors to understand the various tax implications
More informationTaxation of Employee Stock Options
A common incentive program provided by Canadian employers is a stock option plan. These programs grant employees (including directors) the right to acquire a set number of shares of the employer (or parent)
More informationUNDERSTANDING TRUSTS CONTENTS. What is a trust?
UNDERSTANDING TRUSTS Trusts are a powerful tool for tax and financial planning. The usefulness of a trust is based on the fact that a trustee can hold property on behalf a single beneficiary, or a group
More informationPARSONS PROFESSIONAL CORPORATION
PARSONS PROFESSIONAL CORPORATION Chartered Professional Accountants 245 Yorkland Blvd., Suite 100 Toronto, Ontario M2J 4W9 Tel: (416) 204-7560 Fax: (416) 490-8275 TAX LETTER October 2018 ALLOWABLE BUSINESS
More informationOverview of the Canadian income tax system
The Navigator INVESTMENT, TAX AND LIFESTYLE PERSPECTIVES FROM RBC WEALTH MANAGEMENT SERVICES Cullen Wealth Management RBC Dominion Securities Charles W. Cullen III, CFP, CIM Vice-President, Portfolio Manager
More informationTrusts An Introduction
Trusts can be highly effective wealth management vehicles, especially for income splitting, tax and estate planning purposes and wealth protection. A trust is an arrangement whereby a settlor transfers
More informationRRSPs and RRIFs on death frequently asked questions
Tax, Retirement & Estate Planning Services WEALTH TRANSFER STRATEGY 8 RRSPs and RRIFs on death frequently asked questions Most Canadians are familiar with the tax advantages of using registered savings
More informationREFERENCE GUIDE Testamentary Trusts
REFERENCE GUIDE Testamentary Trusts Although this material has been compiled from sources believed to be reliable, we cannot guarantee its accuracy or completeness. All opinions expressed and data provided
More informationRetirement Compensation Arrangement (RCA)
October 7, 2010 Retirement Compensation Arrangement Most business owners and professionals are often left in a state of shock when they see the small percentage of post retirement income provided by their
More information2013 Year End Tax Tips
TAX TIPS 2013 Year End Tax Tips Jamie Golombek, CPA, CA, CFP, CLU, TEP Managing Director, Tax & Estate Planning, CIBC Wealth Advisory Services Jamie.Golombek@cibc.com With December 31 st fast approaching,
More informationSHARING INTERESTS IN A LIFE INSURANCE POLICY
SHARING INTERESTS IN A LIFE INSURANCE POLICY A GUIDE FOR LAWYERS AND ACCOUNTANTS Shared ownership and shared benefit life insurance arrangements Life s brighter under the sun This guide is designed to
More informationSUCCESSION PLANNING AND THE FAMILY FARM
SUCCESSION PLANNING AND THE FAMILY FARM SPONSORED BY: SCOTIA PRIVATE CLIENT GROUP SCOTIABANK, WINKLER Presented by: Larry H. Frostiak, FCA, CFP, TEP Thursday, April 7, 2011 Succession Planning and The
More informationPROFESSIONAL CORPORATIONS IN ONTARIO
PROFESSIONAL CORPORATIONS IN ONTARIO Recent corporate tax rate reductions, enacted and proposed, make it an excellent time for professionals to consider incorporating their practices. The low corporate
More informationJanuary 2015 MOVING EXPENSES TAXATION OF SPOUSAL AND SIMILAR TRUSTS CAPITAL GAINS EXEMPTION PARTNERSHIP INFORMATION RETURNS AROUND THE COURTS
TAX LETTER January 2015 MOVING EXPENSES TAXATION OF SPOUSAL AND SIMILAR TRUSTS CAPITAL GAINS EXEMPTION PARTNERSHIP INFORMATION RETURNS AROUND THE COURTS MOVING EXPENSES You can deduct certain moving expenses
More informationThis four-part series takes you through some of the key planning issues you should consider at various stages of your professional career.
RBC Wealth Management Services The Navigator Wealth Planning for Veterinarians Part 2: Starting Out on Your Own Whether you are a new graduate, working to gain experience, running your own practice or
More informationUS and Canadian tax considerations for withdrawals and transfers to RRSP
Reference Paper for Vancity US and Canadian tax considerations for withdrawals and transfers to RRSP Introduction This paper will discuss the tax implications for Canadian resident who has participated
More informationThe practice arrangement you choose should be compatible with your personality, personal goals, preferences and financial constraints.
RBC Wealth Management Services The Navigator T HE H EACOCK G ROUP WWW. THEHEACOCKGROUP. COM TIM H EACOCK Investment Advisor 705-444-4772 timothy.heacock@rbc.com S ARAH G AZAREK Associate Advisor 705-444-4557
More informationYEAR-END INCOME TAX STRATEGIES FOR CANADIANS 2018
YEAR-END INCOME TAX STRATEGIES FOR CANADIANS 2018 Tax and Estate Reports As the holiday season approaches most of us are focused on spending time with family and friends. It s also the opportune time to
More informationWe are very proud of you all and your group s 100% pass rate!
TAX UPDATE Congratulations To all successful CFE Writers including our newest CPAs from left to right: Tara DiZazzo, Ryan Hindmarch, Tracy Zhang, Eric Casey, Lesley Li and Nick Miller We are very proud
More informationReference Guide ESTATE FREEZES
Reference Guide ESTATE FREEZES The estate freeze is a strategy used by many Canadian business owners to help accomplish estate-planning, business succession and asset protection objectives. This reference
More informationPERSONAL TAX MEASURES TFSA CONTRIBUTION LIMIT RRIF MINIMUM AMOUNTS
March 22, 2013 2015 Federal Budget Jamie Golombek, CPA, CA, CFP, CLU, TEP Managing Director, Tax & Estate Planning, CIBC Wealth Advisory Services Jamie.Golombek@cibc.com Debbie Pearl-Weinberg, Executive
More informationMinimizing taxes on death
TAX, RETIREMENT & ESTATE PLANNING SERVICES WEALTH TRANSFER STRATEGY 9 Minimizing taxes on death Nobody likes to think about their death and who wants to pay more tax than they have to? But, with a little
More informationAre You A Director Of A Corporation? Beware!
TAX UPDATE Are You A Director Of A Corporation? Beware! If you are listed on the provincial or federal public registry of companies as being a director of any corporation (including a non-profit or a charity)
More informationTAX TIPS. Smart Decisions. Lasting Value. Audit Tax Advisory
TAX TIPS Smart Decisions. Lasting Value. Audit Tax Advisory Join our online community In this issue: Investment income 3 Facebook.com/CroweSoberman On Crowe Soberman s Facebook page, you can stay in the
More informationYEAR-END INCOME TAX STRATEGIES FOR 2017 Tax and Estate Reports November 2017
YEAR-END INCOME TAX STRATEGIES FOR 2017 Tax and Estate Reports November 2017 As the holiday season approaches most of us are focused on spending time with family and friends. It s also the opportune time
More informationWelcome: Proposed Tax Changes for Private Corporations
Welcome: Proposed Tax Changes for Private Corporations WEBINAR: Proposed Tax Changes for Private Corporations September 18, 2017 2:30-4:30 PM EST Registration URL: https://attendee.gotowebinar.com/register/5371598472188728579
More informationProfessional corporations offer tax breaks
Tax, Retirement & Estate Planning Services INVESTMENT INSIGHT Professional corporations offer tax breaks Many professionals in Canada are able to incorporate their practice, which allows them the opportunity
More information2013 Year End Tax Tips by Jamie Golombek
November 2013 2013 Year End Tax Tips by Jamie Golombek With December 31st fast approaching, here s our updated, annual look at some year-end tax tips you may wish to keep in mind as we enter the final
More informationIncome Splitting in Retirement
Income Splitting in Retirement INCOME SPLITTING IN RETIREMENT [Please note that any reference to the term spouse in this article includes a reference to the term commonlaw partner.] Couples planning for
More informationWhat is a trust? Creating a living trust. Parties to a trust. Potential uses of a trust. Taxation of trust income. Assets held in a trust
The Navigator RBC Wealth Management Services Living / family trusts A living trust can be an effective wealth planning tool in appropriate circumstances, facilitating strategies such as income splitting,
More informationTAX LETTER. August 2018
TAX LETTER August 2018 SUPERFICIAL LOSSES ROLLOVERS INTO CERTAIN PERSONAL TRUSTS SPLITTING PENSION INCOME WITH YOUR SPOUSE DEDUCTION OF LIFE INSURANCE PREMIUMS PRESCRIBED INTEREST RATES AROUND THE COURTS
More informationRBC Wealth Management Services
RBC Wealth Management Services The Navigator C HARLES W. C ULLEN III CFP(Canada and U.S.),CIM Associate Portfolio Manager & Wealth Advisor 902-424-1092 charles.cullen@rbc.com D AYNA P ARK Associate 902-421-0244
More informationCurrent Income Tax Issues for Agriculture
Current Income Tax Issues for Agriculture Presented by Vern H. Peters, CPA, CA Tax Partner (2016/01/26) Current Income Tax Issues > Incorporation > Succession > Exit 1 Incorporation Incorporation > In
More informationThe Business Owner s Guide. 10 key decisions for business owners
The Business Owner s Guide to Wealth Management 10 key decisions for business owners RBC Wealth Management RBC Wealth Management provides comprehensive services designed to address your multi-faceted financial
More informationThe RBC Dominion Securities
The RBC Dominion Securities Family Trust A guide for clients Professional Wealth Management Since 1901 Table of contents Is an RBC Dominion Securities Family Trust right for you? 2 What is a trust? 2 Inter-vivos
More informationTaxation on the Transfer of Farm Business Assets to Family Members R.W. Gamble
Taxation on the Transfer of Farm Business Assets to Family Members R.W. Gamble ORDER NO. 09-015 AGDEX 827 APRIL 2009 Replaces OMAFRA Factsheet 03-023, Taxation on the Transfer of Farm Business Assets to
More informationESTATE PLANNING CONTENTS. Objectives of estate planning
ESTATE PLANNING Like most people, you have definite goals, both personal and financial. However, without a plan to focus your efforts, it will be very difficult to achieve them. This bulletin is designed
More informationTAX PLANNING USING PRIVATE CORPORATIONS
TAX PLANNING USING PRIVATE CORPORATIONS A review of the July 18, 2017 proposals from the Department of Finance Jennifer Dunn, CPA, CA, TEP September 29, 2017 TAX PLANNING USING PRIVATE CORPORATIONS INCOME
More informationADVANCED TAX PLANNING
ADVANCED TAX PLANNING 18 FORUM Rethinking RRSPs Business owners tend to pay themselves enough each year to ensure they can maximize their RRSP contributions. Yet given the tax deferral opportunities available
More informationIncorporating your practice A guide to Why and How for new health care professionals
Incorporating your practice A guide to Why and How for new health care professionals 2 Incorporating your practise Are you thinking about incorporating your practice? The medical * and dental professions
More informationTAX FACTS & FIGURES. April 2018
TAX FACTS & FIGURES April 2018 Tax Facts and Figures is produced by Welch LLP as an information service with the understanding that it does not render accounting, legal or other professional advice. The
More informationSHARE PURCHASE TRANSACTIONS PART 1
SHARE PURCHASE TRANSACTIONS PART 1 This issue of the Legal Business Report provides current information to the clients of Alpert Law Firm on the major tax considerations arising from the purchase and sale
More informationTAX LETTER. April 2012 THE CAPITAL GAINS EXEMPTION
THE CAPITAL GAINS EXEMPTION TAX LETTER April 2012 THE CAPITAL GAINS EXEMPTION NEW RRSP PENALTIES RRSP LIFELONG LEARNING PLAN TRANSFER OF DIVIDEND TAX CREDIT TO SPOUSE DONATIONS OF PUBLICLY-LISTED SECURITIES
More informationFEDERAL BUDGET HIGHLIGHTS THE CAPITAL GAINS EXEMPTION RESERVES FOR RECEIVABLES AROUND THE COURTS
TAX LETTER May 2016 FEDERAL BUDGET HIGHLIGHTS THE CAPITAL GAINS EXEMPTION RESERVES FOR RECEIVABLES AROUND THE COURTS FEDERAL BUDGET HIGHLIGHTS The Liberal government released its first Federal budget on
More informationRRSP Checklist. To qualify as a 2010 deduction, contributions to your personal or spousal RRSP must be made on or before March 1, 2011.
RRSP Checklist The RRSP deadline is March 1, 2011. To qualify as a 2010 deduction, contributions to your personal or spousal RRSP must be made on or before March 1, 2011. Determine your RRSP contribution
More information