The tax-free FHSA was introduced in 2023 to help first-time home buyers save up to $40,000 for a home purchase. Individuals eligible to open an FHSA must be at least 18 years of age and resident in Canada. The individual must also have not lived in a home that they or their spouse owned jointly or otherwise at any time in the year or the preceding four calendar years. Contributions to an FHSA are deductible…
The Canadian Federation of Independent Businesses (CFIB) released a report on January 10, 2023, focused on succession expectations for small businesses. It included the following survey responses: 76% of small business owners (constituting $2 trillion in business value) are planning to exit their business in the next 10 years; 9% have a formal business succession plan in place; obstacles to succession planning include: finding a suitable buyer (54%), business valuation (43%), and over-reliance of owner…
In a January 23, 2023 French Court of Quebec case, a commissioned salesperson deducted nearly $600,000 over2015 and 2016, in sponsorship expenses of a professional cycling team in Canada. The individual was an investment advisor and reported commission income of $1,493,910 and $1,263,360 and taxable capital gains of $2,276,374 and $99,767 in the respective years. The taxpayer argued that the sponsorship promoted his services as an investment advisor. As the main sponsor of the cycling…
Earnings in a TFSA are typically not taxable. However, earnings in a TFSA become taxable when they are earned from carrying on a securities trading business. In a February 6, 2023 Tax Court of Canada case, CRA had assessed the TFSA on the basis that it was carrying on a business and was therefore taxable on its income for the 2009 through 2012 taxation years. The TFSA holder was a professional investment advisor who had…
UHT is a 1% federal tax intended to apply to the value of vacant or underused residential real property owned by non-resident non-Canadians. However, many Canadian individuals and other entities are also required to file UHT returns and may even be liable for the tax. Numerous exemptions from the tax itself exist, but significant penalties can apply where the required return is not filed, even if no tax is payable. UHT was first applicable to…
Budget 2023 (A Made-in-Canada Plan: Strong Middle Class, Affordable Economy, Healthy Future) was introduced in the House of Commons on March 28, 2023. The top five changes that may impact individuals and owner-managed businesses are as follows: Dental plan – The Canadian Dental Care Plan would be introduced to provide coverage for all uninsured Canadians with an annual family income of less than $90,000 (the previous Canada Dental Benefit only provided benefits for children under…
The Canada dental benefit, announced in September 2022, provides up-front tax-free payments to cover dental expenses for children under age 12 without dental coverage. The program began December 1, 2022, with expenses retroactive to October 1, 2022 being covered. The program is available for two periods: December 1, 2022 to June 30, 2023, and July 1, 2023 to June 30, 2024. While the program expires in mid-2024, the government has stated that it is committed…
CRA updated several administrative policies in respect of employment benefits, effective January 1, 2022. Two of the key changes relate to employee gifts and parking. These updates were released in late 2022. Gifts, awards and long-service awards Under CRA’s existing gifts and awards administrative policy, the first $500 of annual gifts and awards provided to arm’s length employees is non-taxable. This policy does not apply to cash or near-cash gifts. Historically, CRA had considered all…
A September 12, 2022 Tax Court of Canada case reviewed the gain on a residential property purchased in 2007 and disposed of in 2011. The property was substantially rebuilt during the ownership period. The proceeds, cost and gain were all determined by CRA as the sale was unreported. These amounts were largely unchallenged by the taxpayer and accepted by the Court. The Court noted that the taxpayer’s tumultuous relations with her ex-husband, whom she divorced…
Covid Benefits: Review/Audit Activity On December 6, 2022, the Auditor General of Canada released its report on COVID benefit compliance enforcement. The report reviewed a total of $210.7 billion in payments with the following breakdown among programs. Canada Worker Lockdown Benefit (CWLB) – $0.9 billion Canada Emergency Wage Subsidy (CEWS) – $100.7 billion Canada Recovery Sickness Benefit (CRSB) – $1.5 billion Canada Recovery Childcare Benefit (CRCB) – $4.4 billion Canada Recovery Benefit (CRB) – $28.4 billion Canada Emergency Response Benefit (CERB) and related EI program – $74.8 billion…
