Blog Archives

Restricting Multiplication of the small business limit

2016 Federal budget announced measures to reduce a Canadian controlled private corporation’s accessibility to the small business limit by restricting multiplication of the small business limit. The announcement introduced the term specified corporate income (SCI) – defined as income earned through the provision of services or property to another corporation where there is common ownership.

Let’s say that there are two unassociated corporations: OpCo and ServiceCo. OpCo pays ServiceCo a management fee for management services provided.

Previously OpCo and ServiceCo were each entitled to claim the $500,000 small business limit and, consequently, each corporation would pay 13% tax in British Columbia (federal and provincial combined) on its first $500,000 of qualifying income.

Effective for taxation years beginning on or after March 22, 2016, if there is common ownership between OpCo and ServiceCo, then SerivceCo cannot claim the small business limit on the active business income earned from OpCo unless OpCo assigns a portion of its unused small business limit to ServiceCo. This assignment is done by completing “a special form” – which has not yet been released.

Common ownership exists when ownership interest in Opco is held by:

  • ServiceCo;
  • any shareholder of ServiceCo.
  • any person who does not deal at arm’s length with any shareholders of Service Co.

However, if 90% or more of ServiceCo’s active business income is earned from providing services to arm’s length persons other than OpCo, then these SCI rules do not apply.

If Opco does not assign any of its small business limit to ServiceCo, ServiceCo will pay tax 26% tax – rather than 13% tax – in British Columbia (federal and provincial tax combined).

As at the date of the post, this 2016 Federal budget initiative had not yet received Royal Assent.

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Your Money Map Workshop November 8th with Money Coaches Canada

November is Financial Literacy Month and this is a great reminder of the many benefits that come along with getting organized with your money; less debt and stress, clarity on your goals, how to measure your progress toward them and better communication with your spouse to name just a few!

MCC_Logo

Your Money Map will help you get organized and show you the way to financial peace of mind.

Space is limited and the deadline for registrations is November 3rd so sign up now to avoid disappointment!

Your Money Map
Create a financial road map to your goals!
Do You…

  • Make a good income but feel financially stuck in a rut
  • Feel ready to take your next steps in building your financial knowledge
  • Want a practical system to manage your money and plan for your goals
  • Want to be DEBT FREE!

Join us and you can expect…

  • A full day of learning and DOING!
  • A personalized Money Map that includes:
    • ✔A Personal Goals Statement
    • ✔A Net Worth statement
    • ✔A Spending and Savings Plan
    • ✔A Debt Management Plan
  • A functional system to stay on track, money information, tools and tips in plain language!
  • Clarity on your Next Steps…

When: Saturday Nov 8th 9:30 am – 5:30 pm with optional post workshop support & 1 follow up session on Saturday, December 6th, 2014 from 10am – 12pm
Where: 425 West 8th Ave Vancouver
Cost: $275 per person for workshop only, $375 for workshop and follow up

$425 couples for workshop only, $575 for workshop and follow up

Click here to register

“Your Money Map” workshop hosted by Money Coaches Canada (MCC)

MCC_LogoMoney Coaches Canada (MCC) is hosting a workshop based on their new book!

Your Money Map

Create a financial road map to your goals!

Do You…

  • Make a good income but feel financially stuck in a rut
  • Feel ready to take your next steps in building your financial knowledge
  • Want a practical system to manage your money and plan for your goals
  • Want to be DEBT FREE!

Join us and you can expect…

  • A full day of learning and DOING!
  • A personalized Money Map that includes:
    • ✔A Personal Goals Statement
    • ✔A Net Worth statement
    • ✔A Spending and Savings Plan
    • ✔A Debt Management Plan
  • A functional system to stay on track, money information, tools and tips in plain language!
  • Clarity on your Next Steps…

When: Saturday July 12th 9:30 am – 4:30 pm
Where: 425 West 8th Ave Vancouver
Cost: $275 per person / $425 couples

For more information and registration, check out MCC’s website.

2013 BC Budget Highlights

It’s traditional for finance ministers in Canada to buy new shoes on the day before they announce the annual budget.  BC Fiinance Minister Mike de Jong took a new spin on this tradition and wore ice skates for the budget speech today.

De Jong's Skates

Some of the highlights from today’s budget include:

1. The New BC Training and Education Savings Grant

For those born in 2007 or later and have an RESP account, their families may apply for a one-time grant of $1,200 before he or she turns seven.  The family is not required to match or provide additiona contributions to earn the grant amount.

2. Earning more than $150,000?

Beginning in January 2014 the income tax rate on earnings in excess of $150,000 will be increased to 16.8% – an increase of 2.1%.

3. BC Child Tax Benefit

Beginning in April 2015 (yes, 2015) this new benefit program will come into effect.  Eligible families will earn $660 per year for children under the age of six.  As this is a refundable provincial tax credit, families may receive a refund of up to $660 upon filing their personal tax returns.

4. MSP Premiums

Medical Service Premiums will be increased by 4% on January 1, 2014.

5. Corporate Tax Rate Increase

The “non”-small business tax rate will increase by 1% to 11% on April 1, 2013.  Last year’s budget announced that a 1% increase would occur in 2014 if warrented by the economic situation.

This budget will not be debated or voted upon until after the May 14, 2013 provincial election.

Government Spending

MacLean’s magazine January 14, 2013 edition includes an article entitled “99 Stupid Things The Government Did With Your Money“.

Some of our “favourites” include $56,000 spent on a photo shoot for Finance Minister Jim Flaherty and the last penny (No. 29) and the $176,000 spent over the last five years on hockey pucks by the Department of National Defense (No.94).