Baker Tilly Canada

Disability Tax Credit – 2021 Federal budget proposals – now law

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The 2021 Federal budget[1] announced proposed changes to the Disability Tax Credit (DTC) to broaden its scope and provide more clarity.  These proposed legislative changes are now law with an effective date of January 1, 2021[2]. The Disability Tax Credit A taxpayer has access to the DTC when Canada Revenue Agency (CRA) formally approves the T2201 – Disability Tax Credit Certificate. This approved certificate confirms that the taxpayer has a….

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Canada Revenue Agency, Disability

The evolution of trust drafting

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A trust indenture established today looks nothing like a trust indenture established 10 or 20 years ago. The evolution of trust drafting, and the rigid legalese once used for trusts has given way to language that better anticipates the myriad of potential scenarios typically faced by today’s clients. This evolution in trust language is most noticeable when reviewing the modern beneficiary clauses. Evolution of trust language Trusts have always contained….

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Business Succession Planning, Trusts

A family trust and its beneficiaries – think twice before including your niece or nephew

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Discretionary family trusts used to be a staple in most private company corporate structures. The income splitting benefits were obvious, and professionals were more than happy to implement a family trust in almost any corporate structure. The popularity of using family trusts eventually led to complacency from some professionals in understanding the detailed tax rules that applied to implementing those trusts. In the earlier years of drafting trust documents, professionals….

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Canada Revenue Agency, Tax Issues, Trusts

Crypto assets – Canadian or foreign – it matters!

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Crypto assets are intangible digital assets that exist on a decentralized network through distributed ledger technology (DLT) – such as blockchain. A distributed ledger is a type of database that stores electronic records shared and replicated across many locations in numerous countries and maintained by a peer-to-peer world-wide decentralized network. Therefore, the crypto asset is not exclusively situated in any particular country making it difficult for the taxpayer and professionals….

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Estate Administration, Tax Issues

Bare trusts – we have to do what now?

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On February 4, 2022, exactly 1,438 days after the original draft legislation was introduced in the 2018 Federal Budget, the Department of Finance (Finance) released revised draft legislation[1] for beneficial ownership reporting for trusts. This revised draft legislation contained two significant changes: Effective date was changed to taxation years that end after December 30, 2022; and Bare trusts[2] and arrangements are now specifically included Given that the original draft legislation….

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Trusts

Preferred shares – Liability or equity?

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There has been significant debate over the years regarding the financial statement presentation of redeemable or mandatorily retractable shares (RoMRS) as either a liability or equity. First, a bit of background When Accounting Standards for Private Enterprises (ASPE) were issued in 2011, it was determined that RoMRS should continue to be recorded at par, stated or assigned value in a separate component of equity.  An amendment to ASPE reporting of….

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Estate Planning
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