Year End Planning: The Election Has Changed Everything

Year end tax planning will need to be rethought in light of the dramatic change of government in Canada.  The most significant questions surround the implications for both winners and losers.

The losers need to plan now to preserve what’s left of generous tax-efficient savings under increased TFSA room in particular; while the soon-to-be eliminated Family Tax Cut will put the focus back on income-tested criteria most helped by net income planning.

By far the biggest winners will be low to middle income families who will see large increases in the Child Tax Benefit coupled with tax savings because the taxable UCCB will be rolled into the non-taxable CTB.  Families who benefitted from the Family Tax Cut will lose some ground as that windfall is eliminated but unless family income is high, the increased CTB will more than make up for this loss.  Also winners – middle income earners who can anticipate a dip in tax rates to 20.5% in the future – will unfortunately lose the opportunity to max out TFSA contributions at today’s $10,000 level if the Liberal tax platform comes to fruition soon.

These and many more tax changes for owner-managers and high net worth clients will be the focus of a comprehensive and advanced tax planning session that advisors from both the tax and financial services will not want to miss, if comprehensive wealth planning is a part of their value proposition.

Register now for Distinguished Advisor Workshops – Oct. 27 in Winnipeg, Oct. 28 in Vancouver, Oct. 29 in Calgary, and Nov. 2 in Toronto.

Who's affected by the changes to come:

• High income clients - when will they pay more on income over $200K?
• Last surviving spouses - will final income fall into 33% tax bracket?
• TFSA investors - when will maximum $10,000 limitation be reduced?
• UCCB recipients - when will monthly cheques be replaced with the income-tested CTB?
• Family Tax Cut - when will it cost more to be a stay-at-home parent?

Evelyn Jacks, President Knowledge Bureau