Aravind (Along with some other notable FP collective members including Mark McGrath, Ben Felix, and Tim Lew) broke down the new capital gains inclusion rate for corporations & trusts and what the downstream implications might be.
Aravind (Along with some other notable FP collective members including Mark McGrath, Ben Felix, and Tim Lew) broke down the new capital gains inclusion rate for corporations & trusts and what the downstream implications might be. With the inclusion rate going to 2/3 for all capital gains in corporations & trusts, the effective tax on capital gains has increased greatly.
The downstream implications include:
The impact on the value of incorporating overall (especially for professional corps)
The changed value of capital gains and the impact on taxes personally as well as factoring in a reduced CDA (Capital Dividend account)
Whether it makes sense to trigger gains now or hold on to them for deferral
Impact on Registered Accounts vs Corporations for investment deferral
How this may change the Salary vs Dividend discussion
Passive income complications such as RDTOH increase and AAII increase
In Kind Charitable contributions efficiacy
Tax Efficient investing just increased in value
The various downstream implications on trusts including their simultaneous increased relevance but also the danger of retaining capital gains inside a trust vs flowing out to a beneficiary
Aravind Sithamparapillai
Discussion