Trusts for Disabled Beneficiaries: Good News!

One common planning technique for disabled individuals involves the use of a trust under which the trustees possess ultimate discretion over any distributions to be made. In other words, the beneficiary has no enforceable right to receive any distributions from the trust unless or until the trustees exercise their discretion in the beneficiary’s favour. The intent of such a trust is that the trust assets not be considered assets of the beneficiary, such that they…

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  • Post Category:Tax Planning

Employment Expenses: Costs of an Assistant

A November 5, 2019 Tax Court of Canada case reviewed the deductibility of employment expenses by a manager overseeing the Canadian sales force and operations of a multinational manufacturer of dental instruments and products. The taxpayer’s employer had no Canadian office, and she travelled extensively to meet with sales representatives, dealers and customers throughout Canada. Expense of assistant Almost half of the taxpayer’s claimed expenses, which exceeded $80,000, related to her husband’s role as her…

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Unclaimed Bank Deposits or Property

Unclaimed property refers to accounts at banks, financial institutions, and other organizations where there has been no activity generated or contact with the owner for a period. Typical forms of unclaimed property can include chequing or savings accounts, term deposits, Guaranteed Investment Certificates (GICs), bank drafts, traveller’s cheques, money orders, and certified cheques. A number of different organizations (depending on the governing legislation) collect these funds and administer the return to their rightful owner, where…

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Demand For Client Information: CRA’s Abilities

Canada Revenue Agency uses third parties to get information about other taxpayers to ensure they are complying with their tax responsibilities. This could include obtaining information from a business about its employees, customers or suppliers, without needing to list their specific names. CRA has recently announced that they intend to continue and increase the use of these information gathering methods. In order to obtain such information without providing specific names, CRA must first obtain the…

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Property Flipping: Income or Capital?
House Flipping

Property Flipping: Income or Capital?

In an August 14, 2019 Tax Court of Canada case, at issue was whether the sales of four properties in B.C. were on account of income (fully taxable) or capital (half taxable), and whether they were eligible for the principal residence exemption (potentially tax-free) as claimed by the taxpayer, a real estate agent. Essentially, the Court was trying to determine if the properties were purchased with the intent to re-sell for a profit, or for…

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Anxiety, Depression & Phobias: Disability Tax Credit

In an April 3, 2019 Tax Court of Canada case, at issue was whether the impact of an individual’s mental impairment entitled her to the disability tax credit (DTC). The taxpayer suffered from social anxiety, depression and phobias. A taxpayer may be eligible for the DTC if the impairment(s) represents a marked restriction in the ability to perform a basic activity of daily living. In particular, the impairment must affect and permeate the individual’s life…

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Zero-emission Vehicles: Personal and Corporate Incentives

On April 17, 2019, Transport Canada released details on the purchase incentive of up to $5,000 for zero-emission vehicles as originally proposed in the 2019 Budget. The incentive will apply to new purchases or leases on or after May 1, 2019. To receive the incentive, the manufacturer’s suggested retail price must be less than $45,000 for vehicles with six or fewer seats, while a vehicle with seven or more seats must have a suggested retail…

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Reimbursement For Work Clothing: Taxable

In an April 17, 2019 Technical Interpretation, CRA was asked whether clothing reimbursements paid to maintenance employees were taxable benefits. Employees were not required to wear specific uniforms and were reimbursed based on receipts, to an annual maximum. CRA referred to Guide T4130 Taxable Benefits and Allowances, which states that clothing is generally a personal expense, except where either of the following applies: the employee is required to wear a distinctive uniform while carrying out…

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Special Work Site Allowance: Home Base Needed

In a January 29, 2019 Technical Interpretation, CRA discussed the criteria for tax-exempt allowances for board and lodging received for periods an employee was working at a special work site. To be a special work site, the following criteria must be met: the work performed at the location must have been of a temporary nature;the employee must have maintained a self-contained domestic establishment (SCDE) elsewhere which was used as their principal place of residence;the SCDE…

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Home Buyers’ Plan (HBP): Enhanced Possibilities

The HBP allows first-time home buyers to withdraw amounts from their RRSP to buy or build a home. Budget 2019 proposed to increase the HBP withdrawal limit to $35,000 from $25,000. As the HBP is available to each individual, a couple could access up to $70,000 to assist in a first-time home purchase.

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