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The Department of Finance announced 3 changes to the Canadian Income Tax Act on Tue July 18. The first one related to income sprinkling and is designed to reduce income splitting with a spouse and children through the use of dividends and through the lifetime capital gains exemption. Detailed proposed legislation has been released. A second proposal, without any details, wants to prevent private corporations from accumulating funds and using them to make passive investments. The third proposal relates to tightening the rules designed to prevent the conversion of regular income or dividends into capital gains that are taxed at half rates.

Disclaimer:

"This article provides information of a general nature only. It is only current at the posting date. It is not updated and it may no longer be current. It does not provide legal advice nor can it or should it be relied upon. All tax situations are specific to their facts and will differ from the situations in the articles. If you have specific legal questions you should consult a lawyer."

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