Capital gain planning for Canadian private corporations and their shareholders has become a more taxing math exercise post 2024 federal budget. There is plenty to consider given that capital gains earned in a corporation will have an inclusion rate of 66.67 percent versus the 50 percent inclusion rate for individuals. However, at the personal level, only the first $250K of
For the past two decades, tax practitioners had little doubt that incorporating even a moderately successful business made financial sense. The low corporate tax rate for CCPCs on the first $ 500K of corporate profit, the slight tax advantage the ineligible dividends received in the hands of the shareholders, and the tax free CDA extraction on capital gains all made
For CCPCs who have managed to survive and thrive the last 8 years of tax punishment and Covid disruptions, what to do after the 2024 proposed tax rules changes? Dividends vs Payroll Prior to 2016, remuneration to shareholders using dividends was the more tax advantageous option. Dividends did not require CPP premiums to be paid by the employer and the
