With personal tax season behind us, it’s a good time to start thinking about tax planning for 2023 and beyond. In this post, we take a look at the federal government’s 2023 budget titled “A Made-in-Canada Plan: Strong Middle Class, Affordable Economy, Healthy Future,” which was released on March 28th (the “Budget”). The Budget’s main themes are inflation relief, strengthening public healthcare, investing in the economy and fiscal management
Tax Rates and AMT
No changes to personal, corporate, or capital gains tax rates were introduced; however, an increase to the alternative minimum tax (AMT) from 15% to 20.5% is proposed to ensure “wealthy” Canadians pay their “fair” share. These rules come into effect in 2024 and we expect more details to be released later this year. The AMT rules have been added to Planworth’s roadmap and you can expect to see them on the platform in Q1 2024.
Measures for Individuals, Owner-Managers, and Private Corporations
The Budget includes measures that will be relevant to planning for individuals, owner-managers, and private corporations going forward:
- Registered Education Savings Plans (RESP) – Increasing the withdrawal limit for beneficiaries enrolled in eligible post-secondary education programs
- Registered Disability Savings Plans (RDSP) – Expanding who can establish and hold plans for beneficiaries
- Intergenerational Business Transfer Framework – Addressing technical issues to make it easier to transfer family businesses to the next generation
- Beneficial Ownership Registry – Launching a publicly searchable beneficial ownership registry of federal corporations by the end of 2023
(NOTE: The federal public registry will include beneficial ownership information collected by provinces or territories that choose to participate. Most provinces (other than Alberta and the territories) have introduced their own beneficial ownership transparency legislation, each with unique rules and requirements.)
- Employee Ownership Trusts (EOT) – Helping employees purchase a qualifying business of a Canadian-controlled private corporation (CCPC)
Our product team is working to integrate these measures into the platform and update to the Evaluation, Financial Insights, and Wealth Insights, accordingly. Look out for releases on your Advisor Dashboard and in our newsletter
The Budget also includes measures affecting public corporations, REITs, banks, credit unions, international tax, sales and excise tax, GAAR, and Canada’s clean economy. All budget documents are available from Finance Canada Budget 2023 webpage (https://www.budget.canada.ca/2023/homeaccueil-en.html).