Updated “income sprinkling” proposals for private corporations
Canadian Tax Alert
Updated proposals related to “income sprinkling” have now been released by the Department of Finance. Income sprinkling generally refers to the transferring of income that would otherwise be taxed in the hands of one taxpayer at a relatively high tax rate to another taxpayer at a lower tax rate. This approach is commonly implemented to reduce the overall tax burden for a family.
The modifications to the proposals originally introduced on July 18, 2017 include a series of so-called “bright-line” tests to exclude certain individuals from the tax on split income.
This Canadian Tax Alert aims to help private companies and their owners navigate the updated income sprinkling proposals by highlighting the significant changes and various issues to consider.
To obtain a copy of the alert, please click on the box “Download Alert”.