On July 18, 2017, the Federal Government introduced some proposals and draft legislation which perhaps they’d hoped would be overlooked while Canadians enjoy their summer holidays.
But we’ve noticed.
This proposal announced a 3-prong attack on entrepreneurs – specifically:
- the ability of a business owner to split his or her income across members of the household is to be ended, as of 2018, via a broad expansion of the “tax on split income (TOSI)” rules
- the investment of the tax difference inside a private corporation is to be reviewed, with the intent of taxing away the advantages of the small business deduction; and
- the elimination of the possibility that a business owner might seek to extract funds from his or her corporation at capital gains tax rates, rather than as dividends.