Bill C-31: Royal Asset and New CRA Powers Could Come Soon

Changes are coming to the Income Tax Act and both you and your clients will all be affected with new tax risks including longer tax audits. Bill C-31, which passed second reading in the House of Commons on June 3 and is now at committee stage, contains elements of previous Federal Budgets that will expand the CRA’s compliance and enforcement powers. Here’s what you need to know and pass along to your clients:

Knowledge Bureau designate Kristin Ramlal is a graduate of the RWM™ program, Distinguished Advisor Conference speaker, and a founding member of the new Society of Real Wealth Managers™. Her commitment to education is inspiring! Here is her story:

Summertime is a great time to invest in your professional development, and Knowledge Bureau’s new Ez-Pay installment options make it easier than ever to get started.

The fifth report on the tax gap – the difference between taxes payable if all taxpayer obligations were fully met and what was actually paid and collected – was released this week by CRA for the 2014 year. Focused on corporate tax filers, large and small, a shortfall has been estimated at between $9.4 billion and $11.4 billion, but a closer look at the report finds most individual and corporate taxpayers try their best to comply with Canada’s complicated tax system.

This year, Tax Freedom Day for Canadians fell on June 14, 2019; one day earlier than last year, but almost two months after the US reached the same milestone. The Fraser Institute calculated Canada’s 2019 Tax Freedom Day based on a household income of $117,731 with a 44.7% total tax bill.* This means that the average Canadian works 163 days each year to pay $52,675 in taxes, before they start making disposable income for themselves.

The 2019 Federal Budget introduced two changes aimed at making it easier for first-time home buyers to purchase a home in Canada. This is important due to the new mortgage stress test, and also raises other important questions should housing prices drop.

The CRA recently released a notice that warns Canadians to be on the lookout for real estate investment schemes that promise a significant tax write-off—more than double what you invest. But the old adage rings true: if it sounds too good to be true, it probably is. If you have a client approach you about a great real estate investment, here’s what you need to know to provide them with sound, financial advice: