Author Archives for McGovern Hurley

Federal Budget 2024 Summary

April 23, 2024 2:07 pm Published by Leave your thoughts

The Finance Minister Chrystia Freeland delivered the 2024 federal budget on April 16, 2024. Unprecedented changes were made with respect to the capital gain inclusion rate. The capital gain inclusion rate is proposed to be increased from 50% to 66 2/3%. The following is a summary of some of the most significant announcements contained in the 2024 federal budget. Increasing the Capital Gain Rate: Budget 2024 proposes increasing the capital gains inclusion rate from 50% to 66 2/3%. In particular, the inclusion rate increased for corporations and trusts to 66 2/3% and for individuals on the portion of capital gains

CRA Reverses Course on Bare Trust Filings

March 28, 2024 8:31 pm Published by Leave your thoughts

On March 28, 2024, the Canada Revenue Agency announced that it will no longer require bare trusts to file a T3 trust return, including Schedule 15 (Beneficial Ownership Information of a Trust), for the 2023 tax year, unless the CRA makes a direct request. For more information the team here at McGovern Hurley LLP is always happy to help. John Mendis, Tax Advisory and Compliance Partner, Greg Furyk, Business Advisory and Compliance Partner,

Are You Required to File a T3 Trust Return for 2023?

March 19, 2024 2:21 pm Published by Leave your thoughts

In a previous article (linked here), we discussed the introduction of the long-awaited new trust reporting rules, which will come into effect for trusts with taxation years ending on or after December 31, 2023. Due to the change in reporting requirements, many trusts that were not required to file a trust return in previous years are now required to file a T3 Trust Income Tax and Information Return (“T3 return”) as well as a Schedule 15: Beneficial Ownership Information of a Trust (“Schedule 15”) by 90 days after its year-end of every year starting for the 2023 tax year. Further,

Trusts – New Reporting Requirements

February 21, 2024 10:27 pm Published by Leave your thoughts

Do the new reporting requirements apply to you? Are you the trustee of a personal trust, family trust, testamentary estate, or any other type of trust? Do you own investments or real property on behalf of someone else?Either held personally or through a corporation, partnership, or other trust. Are you a Power of Attorney on a bank account for your elderly parents? Do you own an investment or bank account in trust for a child or grandchild? Is your name on the title of your child’s home to help them get a mortgage? Do you hold any assets jointly with

First Home Savings Account (“FHSA”)

February 13, 2024 3:24 pm Published by Leave your thoughts

What is the FHSA? The federal government has introduced the First Home Savings Account (FHSA) as a savings tool to help future home buyers with the purchase of their first home. The FHSA is similar to a Tax-Free Savings Account (TFSA) and Registered Retirement Savings Plan (RRSP). Like a TFSA, withdrawals made are on a tax-free basis as long as they are used to purchase your first home. Like an RRSP, contributions made within a calendar year can be used as a deduction to taxable income, or if chosen, carried forward to a future year for tax planning purposes. Who

Registered Retirement Savings Plans (“RRSP”)

February 8, 2024 6:50 pm Published by Leave your thoughts

Now is the time to consider contributing to your RRSP if you have not done so already. The deadline for contributing to an RRSP for the 2023 tax year and the deadline is quickly approaching, and this year, it will be on February 29th, 2024. Here is a summary of RRSPs: Contributions made are tax deductible, which means contributing to your RRSP can help reduce your taxes payable or increase your tax refund. Annual Contribution room for 2023 is the lower of $30,780 or 18% of your annual earned income in the previous year. Always confirm the RRSP contribution limit

2024 Tax Planning Tips

February 5, 2024 9:07 pm Published by Leave your thoughts

As we start the year 2024, it is crucial to evaluate your financial situation and explore opportunities for tax optimization. Consider the following deadlines and planning tips to make the most of potential tax savings opportunities: Your Upcoming Tax Deadlines Your Payment Due Dates Planning for Homeowners and Buyers Residential Property Sale: If you have sold a residential property in the 2023 year, it is crucial to disclose specific details about the sale in your 2023 personal income tax return. Make sure to keep all relevant documents accessible for the tax return preparation process. In cases where the property ownership

Changes Required For 2023 T4/T4A Reporting

January 31, 2024 5:08 pm Published by Leave your thoughts

In the 2023 Budget, the federal government committed to fully implement the Canadian Dental Care Plan. This initiative is designed to offer dental coverage to uninsured Canadians with an annual family income below $90,000. The new legislation mandates the reporting of employer-provided dental coverage through T4 (Statement of Remuneration Paid) and T4A (Statement of Pension, Retirement, Annuity, and Other Income) tax slips. This reporting requirement is crucial in ensuring that the benefits of the dental care plan are targeted specifically at Canadians facing an unmet need for dental care and who lack access to private insurance. Hence, beginning with the

Rental Expense Deduction Denial – Canada is Cracking Down on Non-Compliant Short-Term Rentals

December 5, 2023 3:12 pm Published by Leave your thoughts

Many provinces and municipalities across Canada have recently introduced legislation to limit or eliminate short-term rentals of residential real estate in an effort to increase the supply of long-term housing for Canadians. Some provinces, including Quebec and British Columbia, as well as some municipalities, such as Toronto, Montreal, and Vancouver, have already taken action. The federal government has formally expressed support for these action plans and will be cracking down on non-compliant short-term rentals starting in 2024. Proposed New Changes: The newly released 2023 Fall Economic Statement announced that the federal government intends to deny income tax deductions for expenses

New Proposed Tax Changes to Certain Surplus Stripping Transactions May Require Swift Action

November 27, 2023 8:29 pm Published by Leave your thoughts

With the recent introduction of new proposed tax measures in the federal budget, we wish to draw your attention to significant changes impacting the planning opportunities surrounding certain surplus-stripping transactions. A surplus stripping transaction generally involves extracting money from a corporation in the form of capital gains (taxed at approximately 27%, assuming the highest marginal rate), providing a tax-efficient alternative to the traditional dividend method of payment (taxed approximately between 39% to 48%, assuming the highest marginal rates). Proposed New Changes: The most recent Federal Budget proposed to broaden the scope of General Anti-Avoidance Rules (“GAAR”) to include transactions lacking