There are no concrete details, but doctors and lawyers, and possibly other incorporated professionals, should be aware that they may be in the government’s target sights.
There are also rumors that the government may adopt something similar to what Quebec is phasing in, meaning that in order to access the preferential rates of corporate taxes, you need to have more than 3 full time employees. That is scary when you think of all the small businesses that run our economy and represent economic growth and innovation.
At what point does a small business owner throw their arms up in the air and say, “Why should I hire more people if I am only going to lose 53.53% of the additional profit to taxes?”
BIM: What about Estates and Trusts? Is there anything there we should be aware of?
Arden Vanderhorst: There are many changes occurring to the taxation of trusts. While too extensive to cover in a few minutes, the basic change is that starting January 2016, an Estate will only be allowed to benefit from the graduated rates of tax for the first 36 months after an individual’s death. After this 36 month period, the trust will be subject to tax at the highest marginal rates from the first $1 of taxable income.
Previously, these graduated rates were available indefinitely and have been utilized to reduce tax burdens. There is no exemption for previously created trusts. If you are the Executor of an Estate, you should consult your tax professional for more details about these changes.
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