On October 18, 2017 the Department of Finance issued a press release to provide an update on the proposed tax changes. Please visit the following link for more information about today’s release: http://www.fin.gc.ca/n17/17-099-eng.asp . Finance Minister Bill Morneau provided an update on the taxation of passive investments within private corporations. These changes are still proposals and are not yet in force. Proposed legislation for these changes are expected with the 2018 budget. The highlights of the Department of Finance's announcements are as follows:
- $50,000 threshold on passive investment income per year that will not be subject to the proposed higher tax rates on passive investments in private corporations
- Previously accumulated passive investments inside private corporations will not be subject to the $50,000 and will be ‘grandfathered’ along with any income earned on these investments in the future
Our dedicated team of professionals have been working hard to advocate and advise our clients on navigating the proposed legislation since it was unveiled on July 18, 2017. We anticipate more updates to be announced throughout this week. Amended proposed legislation has not currently been provided by the Department of Finance. As more details become available, we look forward to working with our clients and community to address the new tax landscape.