Bill C-31: Royal Asset and New CRA Powers Could Come Soon

Changes are coming to the Income Tax Act and both you and your clients will all be affected with new tax risks including longer tax audits. Bill C-31, which passed second reading in the House of Commons on June 3 and is now at committee stage, contains elements of previous Federal Budgets that will expand the CRA’s compliance and enforcement powers. Here’s what you need to know and pass along to your clients:

Fees paid to financial advisors are in focus these days, as new fee transparency and account performance reporting is being introduced under the third phase of CRM2 next month.

Does financial planning require its own regulatory oversight? That’s the issue the Ministry of Finance in Ontario has charged an expert committee with. Their preliminary recommendations propose an “integrated regulator” and significant restrictions on who has the qualifications to hold themselves out as a financial planner. Consultations on the matter must be submitted by tomorrow, June 17.

It is critical to know the mechanics of tax preparation, not only for those who want to get into or stay in the tax preparation industry, but also for financial advisors who want to offer an integrated, holistic solution to planning for their clients. If you don't know tax, you're likely missing double digit returns in your plans for Real Wealth Management with your clients.

"If you want to succeed you should strike out on new paths, rather than travel the worn paths of accepted success." John D. Rockefeller

Employees who are leaving their jobs and who receive job termination payments or retiring allowances should do some tax planning, perhaps with RRSP contributions and other income splitting or deferral options.

Manitoba’s new government released its first provincial budget on May 31st, announcing three important personal tax changes that signal a change in direction from the previous regime. Small business in Manitoba also got enhancements to three tax credits.