May 2025 Poll

Does the Liberal promise expected soon to cut the lowest personal income tax rate by 1% to 14%,  go far enough to help Canadians impacted by high costs?

What matters is what you keep.  There is no doubt your clients are interested in knowing how to inflation-proof and recession-proof their wealth and navigate successfully through emerging risks from the CRA.  To accomplish the former, advisors must have broader knowledge in tax on upcoming tax changes and how astute investment planning in a very new economic environment can help clients maximize after-tax income and reduce capital erosion.  This year, real estate tax changes are in focus. 

There are very specific rules for opening, withdrawing from and closing a  First Home Savings Accounts (FHSA), the newest registered savings plan in Canada.  It’s very advantageous to qualifying savers, as it provides a tax deduction, tax free growth of savings and a tax free withdrawal when a qualifying home is acquired.  But it’s best to seek the help of a qualified tax services specialist and RWM™ on the financial services side, to complete the transactions.  Those advisors must know about a couple of new forms just released for qualifying withdrawals and transfers. 

At $7,218, the average balance due to CRA at the end of June was unprecedented. Does this surprise you?  It’s the poll question we asked our Knowledge Bureau Report readers last month and, no surprise, 75% of our respondents said yes it did.  Since then, the number has risen even higher to $7,322 as of July 24.  The amount of money owed on 7,006,135 tax returns filed by Canadians is over $51 billion – exactly  $51,301,022,379. What’s changed?  It can depend on many factors. 

CRA and Finance Canada would like to be more effective in thwarting aggressive tax planning schemes.  Despite previous mandatory disclosure rules, the “timely, comprehensive and relevant” information CRA wants hasn’t been forthcoming.  Guidance to new mandatory disclosure rules, which received Royal Assent June 22, 2023, were published July 25 and the penalties for failure to file the required 9-page RC312 are huge, for both taxpayers and their advisors. Of particular concern are new “notifiable transaction” rules. Tax and financial advisors may have difficulty understanding their respective responsibilities. Here’s an overview with the key points:  

At a time when money is in motion, the buying and selling of assets can result in complex tax treatment.  It’s important for tax advisors to work together with clients who are in these processes and bring in the right stakeholder group of legal and financial advisors to close on these transactions.  The tax consequences should always form part of informed negotiations.  In this excerpt from Evergreen Explanatory Notes, we present a primer on terminal losses.

Most donors with higher net worth portfolios know that donating appreciated publicly traded securities, and other financial instruments such as mutual funds, segregated funds, and exchange traded funds, is a great way to amplify giving potential with tax savings.  It’s a triple win: a leveraged opportunity to  support community causes and a great tax and estate planning opportunity for the taxpayer and their survivors.  But there are tax clouds on the horizon.  Wealth managers, and in particular RWM™ (Real Wealth Manager) and MFA-P™ Designates are well positioned to help assemble a multi-stakeholder solution, but need to take action now.