Posted under: News, Business Owners
For the Financial Services community, the 2017 Federal Budget will more be known for what it did not contain rather than what it contained. The increase of the Capital Gains Inclusion rate from 50% to 66% or 75%, the taxation of health and dental Benefits to employees, and any changes to the principal residence exemption were noticeably absent.
The budget does however cite a review of certain corporate savings strategies that the Department of Finance believes provide unfair advantages to high income earners. Income splitting through dividends or capital gains amongst family members, passive investments held within corporations and the conversion of income into capital gains are all areas that the Department of Finance has indicated they will be reviewing in the coming months.
Budget 2017 proposes to extend the anti-avoidance rules that currently apply to Tax Free Savings Accounts (TFSAs), Registered Retirement Savings Plans (RRSPs) and Registered Retirement Income Funds (RRIFs) to Registered Education Savings Plans (RESPs) and Registered Disability Savings Plans (RDSPs). This would primarily apply to the areas of tax advantage rules, prohibited investment rules, and non-qualified investment rules.
GBL’s main focus areas had no changes outlined in the 2017 Budget. This includes Individual Pension Plans (IPPs), Health and Welfare Plans (HAWPs), and Retirement Compensation Arrangements (RCAs). The 2017 Federal Budget felt more like a discussion as to where the current Government would like to focus spending rather than a tax measures plan.
Author: Fraser Lang, CFP, CHS Senior Vice President Sales and Business Development, GBL