Jim Flaherty’s first majority budget proposes several changes to the Income Tax Act that will no doubt have substantial effects on current financial planning strategies. On the whole, we welcome the proposed changes. Some of the proposals which are relevant to the products and services offered by GBL are as follows.

Considering that today so many executives will move multiple times in their career, severance payments can be opportunities for retirement planning and/or tax bracket management.

Executives could defer tax on their severance package with the use of an RCA.

A business owner sells his business at age 59 by way of an asset sale, as a share sale will not trigger the same tax liability. The owner receives $3,000,000 for the sale of the business and plans to retire from the proceeds drawing income until he is 69, at which point he commences drawing from existing RRSP/RIF.