December 18, 2017 -- On December 13, the Federal Government took steps to clarify new rules around tax planning using private corporations.
The Minister of Finance proposed explicit rules for business owners that suggests the following individuals will be exempt from new income sprinkling rules:
- Business owner 65 years of age or older, sprinkling with a spouse is permitted in the same way that pension income can be split among spouses
- Adults 18 years of age or older, provided they work on average at least 20 hours per week in the year or during the previous 5 years
- Adults aged 25 years or older who own at least 10% of the shares of a small business (unless the corporation is a professional corporation or a corporation that earns less than 90% of its income from services or earns its income substantially all from a related corporation).
CREA announced it will review the changes closely with its tax experts and continue to work with the government to ensure further changes are fair and adequate for real estate business owners across the country.
Read the full release from CREA here.