The Justin Trudeau government in July announced a number of tax changes that will have a big impact on business owners, sparking a lot of anger and frustration about the changes among advisers, but not a lot of practical strategies yet.
It is still early days, and not every plan announced or hinted at will be fully rolled out. But if we assume that they are, then here are some ideas on how to handle them.
To start, let’s review the changes on a high level:
1. Business owners who “sprinkle” dividends to family members in order to draw funds out of a corporation at a low tax rate — may no longer be able to do so. This will also likely eliminate the ability of multiple adult family members to take advantage of the lifetime capital gains exemption on a business sale. This usually took place if various family members owned shares of a holding company or the shares were held in a Family Trust.
Read more from Financial Post