♦ The Supreme Court of Canada has determined that section 232 of the Income Tax Act (ITA)  is unconstitutional. This subsection of the ITA sets out a procedure for potentially privileged client documents to be seized from a lawyer’s office.

♦ If separated or divorced parents have joint custody of a child, only one of them may claim the equivalent to married credit under the Canadian Income Tax Act. If they cannot agree on who will claim the exemption, neither may claim it. And, if one parent is paying child support, no equivelant to married claim is allowed by the payor.

♦ Canadian residents are required to report their worldwide income from all sources for Canadian Income Tax purposes. If you do not do this, or if you engage in an offshore structure that violates the intention or spirit of the Canadian Income Tax Act (ITA), you could face a challenge by the Canada Revenue Agency (CRA), and if you lose, you may be subject to interest and penalties. You 'must' disclose any foreign owned assets with a cost of more than $100,000.

♦ You are generally entitled to receive a foreign tax credit on your Canadian Income tax return for the amount of foreign withholding tax paid on amounts earned in other countries. In effect, the Canada Revenue Agency (CRA) recognizes the foreign tax that you have paid as a reduction of your Canadian income tax liability. The goal being to avoid double taxation.. however, there are numerous situations where this does not work..consult the Tax Treaty between Canada and the applicable country for more information.

♦ The "kiddie tax" generaly applies to certain income received by a trust from a related business where minors are beneficiaries of a trust and income is allocated to these beneficiaries. If a family trust is established for the benefit of a spouse or children who have reached age 18 in the year, the kiddie tax won't apply on income taxed in the hands of these beneficiaries. However, the 'kiddie tax' does not apply to Capital Gains.

♦ Disability insurance receipts will be free of Canadian income tax only if an employee has paid the entire insurance premiums personally, or if the premiums for all employees were paid by the employer, and included as a taxable benefit of each employee. Some employee plans are funded through cost sharing...if the employer pays any portion of the premium,, it will taint the tax status of any future benefit claimed under the policy. If the employer pays the premiums and they are not treated as a taxable benefit for all employees, then any disability insurance benefits will be taxable to the individual recipient.

♦ If you disagree with the tax department you need to file a Notice of Objection (NOO) to protect your rights. There are statutory filing deadlines to act on this right. Further, you may not file a a Notice of Objection for a tax return where you have no income or a loss...you must file a Determination of Loss.

♦ Changing the use of a capital property from personal to business or vice versa may give rise to a deemed disposition for Canadian Income Tax purposes. In certain situations, this tax event may be deferred untuiil you actually dispose of the property ...which may include a deemed disposition.

♦ Interest on money borrowed for investment purposes is deductible for Canadian Income Tax purposes for as long as you own the investment or qualifying replacement investment. There are situations where the interest will still be deductible although you have disposed of the underlying asset.

♦ If you formally appeal (file a Notice of Objection [NOO]) a Canadian Income Tax assessment, the Canada Revenue Agency (CRA) must suspend collection action until the appeal is settled. But, if you lose, interest will still apply from original relevant date. Often, it is good practice to pay the assessmsnt to stop the non deductible interest in the event that you are not successful. No such end to collection action occurs with a GST appeal.

♦ The Supreme Court of Canada hasruled on two cases rejecting the “Reasonable Expectation of Profit”  (REOP) test and confirming that tax motivated transactions are not prohibited.

♦ If you are leaving the country and want to determine your tax status, the Canada Revenue Agency (CRA) provides the precribed form 'NR73 Determination of Residency Status (Leaving Canada)' if you want to obtain an official determination. This is essentially a questionnaire in which you provide details of your residential ties or lack of them. To become a non-resident of Canada you must divest yourself of as many residential ties as possible. ie Provincial Medical Covergae, Cell Phone, Canadian bank accounts, Drivers License...etc Proper pre-departure planning is essential.

♦ The Home Buyers’ Plan (HBP) allows a first time homebuyer to withdraw up to $25,000 from an RRSP to buy or build a principal residence. The funds must be repaid or included in income over a 15 year period.

♦ Transactions in stock options are treated in the same way as stocks for Canadian income tax purposes. Generally, they will give rise to a capital gain or loss. They may be classified as pure incime or loss in certain situation as are trades in derivatives.

♦ As a general rule, the receipt of a stock option in a Canadian corporation will not have any Canadian income tax consequences while the exercise of a stock option will be a taxable event.

♦ If you earn income from your principal residence, for example from renting a room, your principal residence will still generally be exempt from Canadian income tax on any capital gain rising on disposition provided the income is incidental to your use of the property, you make no structural changes to the property and you don’t claim capital cost allowance (CCA which is tax depreciation) on the property.

♦ All amounts that you incur as current expenses related to the business (incurred for the purpose of earning income) are generally deductible for Canadian income tax purposes. Capital expenditures can be depreciated. If your business never earns a profit the deductions may be challenged on the basis that you have no reasonable expectation of profit. ie not reasonable

♦ If you owe money to the Canada Revenue Agency (CRA) and can't pay the amount owing or part thereof, file your Canadian income tax return on time to avoid the late filing penalty and be sure to negotiate an acceptable payment arrangement with them so that they don't seize any of your assets, issue payment orders to your employer or bank or take other legal actions. The filing of your return is the critical point, not the payment of the balance owing.

♦ If you fail to file Canadian income tax returns the Canada Revenue Agency (CRA) may arbitrarily assess you and you have the burden of disproving the arbitrary assessment. This is alos referred to as a notional assessment and this can also be done on your GST/HST account.

♦ When buying or selling the assets of a business (proprietorship, partnership or corporation) be sure to allocate the purchase price among the different asset groups, as this will determine the values and treatment for Canadian income tax purposes.

♦ The Ontario Court of Appeal confirmed in the Juliar case that the principle of rectification, obtaining a court order to retroactively correct a written agreement that does not properly record what the parties had intended, is applicable to transactions with Canadian Income Tax implications.

♦ If you operate a business from home you are generally entitled to deduct the cost of your home office for Canadian Income Tax purposes only if a separate part of your home is used to carry out the business on a regular basis or you routinely meet clients and suppliers at this location.

♦ An amalgamation under the Canadian Income Tax Act (ITA) generally has the effect of combining 2 or more corporations into a new corporation with no adverse tax consequences to the shareholders or the combining corporations. Any amalgamation must be from both corporations being incorporated in the same jurisdiction.

♦ In the 1999 Canadian Income Tax case of McFadyen v. The Queen, the taxpayer moved to Japan with his wife, not knowing when and if he would return. He stored his furniture and appliances in Canada and maintained two bank accounts in Canada, owned two houses which he rented out, maintained his membership with a professional association in Ontario, rented a safety deposit box, and maintained an RRSP, credit card and Ontario driver's licence. The Tax Court of Canada concluded that these ties were significant enough to make him ordinarily resident in Canada for the years in question.

♦ A voluntary disclosure is a procedure permitted under the Income Tax Act (ITA) to allow taxpayers to deal with unfilled Canadian income tax or GST/HST returns, unreported income, or other tax adjustments without incurring penalties.

♦ A director may be able to avoid liability under the Canadian Income Tax Act (ITA) and Excise Tax Act (ETA) if he can demonstrate that he exercised the degree or care, diligence and skill necessary to prevent the failure to deduct, withhold or remit that a reasonably prudent person would have exercised in comparable circumstances.

♦ Commencing with the 2001 tax year, same sex couples can make spousal RRSP contributions for Canadian income tax purposes and can make tax free RRSP rollovers in the same way that opposite sex couples can.

♦ Legal or accounting fees incurred to challenge a tax assessment are a deductible expense for Canadian income tax purposes.

♦ Assets of a business, or shares of a corporation, generally may be transferred on a tax deferred basis by a taxpayer to a corporation by electing under section 85 of the Canadian Income Tax Act (ITA). Failure to prepare and file the election can result in a tax liability, penalties and interest.

♦ On death of a Canadian individual there is a deemed disposition of all capital property giving rise to Canadian income taxation on the capital gain. An estate freeze is one way of postponing some of the potential capital gains tax liability.

♦ If you own real estate (other than a principal residence) which has gone up in value since purchase, you have an inherent (unrealised) capital gain that will be taxed when you dispose of the property or die. If you plan to leave the property to your children then gifting it to them before death will trigger the tax. As an alternative you may consider an estate freeze.

♦ A testamentary trust (created upon your death) is entitled to the benefits of marginal tax rates when computing its Canadian income tax liability while all income of an inter-vivos trust (created while you are living i.e Family Trust) is taxed at the top marginal income tax rate.

♦ Legal fees incurred in respect of a child support application to defend against a motion to decrease, increase or establish the right to are generally deductible for Canadian income tax purposes.

♦ If the Canada Revenue Agency (CRA) has challenged (reassessed) any Canadian income tax returns that you have filed, be sure that you keep all original documents related to the year being challenged until the matter is finally settled. In order to claim a Canadian income tax deduction for an allowable business investment loss (ABIL) for money lent to a Canadian Controlled Private Corporation (CCPC), the debt must have been established to have gone bad at the end of the year. NEVER send original reeipts or documents to the Canada Revenue Agency.

♦ The Supreme Court of Canada has confirmed that it has never held that the economic realities of a situation can be used to re-characterize a taxpayer's bona fide relationships. It has held that, absent a specific provision of the Income Tax Act (ITA) to the contrary or a finding that they are a sham, the taxpayer's legal relationships must be respected in income tax cases.

♦ The Supreme Court of Canada decision in the income tax case of Singleton confirmed the principal that in determining whether interest is deductible, if a direct link can be drawn between the borrowed money and an eligible use, the interest expense is generally deductible. Care should be taken to diferentiate between capital expenditures and expenditures on account if income.

♦ A corporation is a separate legal entity (person), so losses that it realizes can't be claimed by it's shareholders. Loans advanced to a corporation by a shareholder may be deductible as an Allowable Business Investment Loss (ABIL). ABIL loss claims are almost always audited by the Canada Revenue Agency (CRA).

♦ Attribution rules generally do not apply to income earned on investments acquired in a child's name with the Child Tax Benefit (CTB) provided an account was established for the child.

♦ If you deliberately falsify your Canadian income tax return, or are grossly negligent in its compilation, you may be subject to a penalty of 50% of the additional tax liability. Even if you are entitled to a refund, this penalty may apply to the adjusted income/expenditures.

♦ If your gross income for a business is more than $30,000 per annum you are required to register for GST/HST.

♦ If moving expenses have been incurred by a student to move from school back home either for the summer or permanently, these expenses can generally be deducted for Canadian income tax purposes by the student against income earned at the new location. Any excess may be carried over to future taxation years. All Moving ependiture claims are typically audited by  the Canada Revenue Agency (CRA).

♦ If you operate a business, your spouse and children can generally be paid reasonable salaries/remuneration which then become a business expense that is deductible for Canadian income tax purposes. Employment Insurance premiums may apply dependant upon the fact pattern.

♦ The Canadian income taxation of spousal and child support payments changed as of May 1, 1997. If you amend a written support agreement made before that date the tax treatments of payments which were deductible to the payor and taxable to the recipient may change.

♦ If you transfer money to a minor child and the investment earns capital gains instead of interest or dividends, the capital gain would be reported on your child's tax return, not on yours, thereby reducing the family’s overall Canadian income tax liability. i.e. is not subject to attribution rules

♦ The use of spousal RRSP's during working years permits the higher income spouse to get the tax benefit of the RRSP income tax deduction, while incurring tax on a lower income when the amounts are withdrawn on retirement or on a withdrawal if the funds are held in the RRSP for at least three years.

♦ If you have income which is not subject to deductions at source you may have to pay quarterly income tax installments. If you fail to pay the installments when due you will be charged interest. However, the Canada Revenue Agency (CRA) cannot force you to pay installments. When the interest exceeds $1,000, significant penalties will apply.

♦ A loss realized on the sale of shares of a small business corporation or debt owed by a small business corporation may give rise to an allowable business investment loss (ABIL), 50% of which is generally deductible in computing your Canadian income tax liability.

♦ If you are the owner (>40% shareholdings or are related and your terms and conditions of employment are not consistent to those offered to non related employees) of a corporation and pay yourself a salary, you are not eligible for Canadian Employment Insurance (EI) as an owner-manager so you should not make any remittance when you complete your personal Income Tax return.

♦ If you’re incorporating your existing business you will have to carry out a tax free rollover of the assets into the corporation and elect to defer income tax under section 85 of the Canadian Income Tax Act to avoid an immediate tax liability.

♦ All amounts that you incur as current expenses directly related to your business are generally deductible for Canadian income tax purposes. Capital expenditures can be depreciated at the prescribed tax depreciation rates. If your business never earns a profit the deductions may be challenged on the basis that you have no reasonable expectation of profit.

♦ A car allowance is taxed as regular income for Canadian income tax purposes. If you require the car for work and your employer gives you a form T2200 you may be able to deduct expenses incurred for the purposes of earning income.

♦ Interest, dividend and most other payments made to a non-resident of Canada are subject to withholding tax under the Canadian Income Tax Act. You need to refer to the tax Treaty between Canada and the relvant jurisdiction for more detailed information.

♦ Reasonable expenses for meals and entertainment incurred for the purpose of earning business income are deductible for Canadian income tax purposes. However, only 50 per cent of these costs are allowed as a deduction for tax purposes. The costs of restaurant gift certificates used for promotion are also subject to this limitation. Further, you are only entitled to a GST/HST Input Tax Credit (ITC) on 50% of the regular rate.

♦ If your liabilities for unpaid Canadian Income Taxes are too high for you to pay you may consider either a formal Proposal under the Bankruptcy and Insolvency Act or going bankrupt. Some exceptions exist such as Student Loan debts.

♦ When making your calculations to determine your Canadian income tax RRSP contribution room, remember that certain deductions, such as net losses from rental properties or employment-related expenses including union dues or traveling expenses will reduce your "earned income" which reduces your RRSP contribution limit for the following taxation year. Also excluded from "earned income" are certain types of income including interest, dividends, capital gains, and most pension income.

♦ To make changes to previously filed personal Canadian income tax returns, individuals should not file an amended tax return. The Canada Revenue Agency (CRA) prefers that individual taxpayers who wish make changes to returns, use form T1-ADJ (Adjustment Request), available at local tax services offices or on the CRA Web site.

♦ There are generally no immediate Canadian income tax consequences as a result of the transfer of capital property to former spouses where the transfer arises from divorce or separation settlements. Care should be taken and special attention applied where one spouse is a resident of another jurisdiction. i.e USA

♦ All amounts received as a consequence of termination of employment, even if received as damages, are fully taxable for Canadian income tax purposes in the year received. However, a portion of the payment may be eligible for transfer to an RRSP as part of a Retiring Allowance.

♦ If a relative wins a lottery and decides to share the winnings with his family, the person who receives the gift from the family member will not have to pay tax on what he receives since there is no gift tax in Canada. Any amounts arising from any source, including lottery winnings, can be gifted to any Canadian resident without Canadian tax implications.

♦ Canadian income tax rules provide for a tax-free rollover of capital gains on disposition of shares of certain active Canadian corporations where the proceeds are used to invest in shares of another active Canadian corporation.

♦ Individuals with grown children who own their own homes or with no children may consider donating an interest in a personal residence to a charity. If the donor wishes to continue to have use of the property for the remainder of his or her lifetime, a residual interest in the property could be gifted to the charity currently without the use of a trust. The donor will receive an income tax receipt for the value of the residual interest transferred. Provided that the home is a principal residence, there will be no taxable capital gain.

♦ The October 17, 2000 mini-budget reduced the capital gains inclusion rate for Canadian income tax purposes from 66 2/3% to 50% effective immediately. Capital Loss carry forwards are based on the historical rates of 50%, 66 2/3%, 75%.

♦ Canada Revenue Agency (CRA) has changed its position relative to the determination of the adjusted cost base (ACB) for Canadian income tax purposes for shares acquired under employee stock option agreements and then immediately sold. The Canada Revenue Agency (CRA) will accept identification of specific securities acquired under the option agreement as being the securities disposed of by the employee, where it is obvious that the securities sold are the ones that were acquired under the agreement. As a result, only the ACB of the securities acquired under the agreement would be used in determining the gain or loss on that particular sale.

♦ An Ottawa Superior Court judge ruled that retired Ottawa school teacher Thomas Kennedy is not exempt from Canada’s Income Tax Act (ITA). The taxpayer argued unsuccessfully that the Income Tax Act (ITA) applies only to corporations and not to natural persons, that income tax is voluntary, and that the form requiring his employer to withhold amounts to cover tax is not valid. The arguments rejected by the court were essentially the same as claims made by anti-tax campaigners (Detaxers) who say they know of lawful ways for individuals to exempt themselves from income tax.

♦ If you’re immigrating to Canada, it may be to your advantage to sell investments with accrued losses before you become a Canadian resident. Otherwise you will probably not be able to utilize the foreign capital loss to offset other gains after you arrive in Canada and any gains that accrue on the investments after immigration will be taxable in Canada when you dispose of them. This includes winding up 401K and IRA plans from the USA by Canadians relocating back to canada and becoming residents for tax purposes.

♦ If you own property in the U.S., your estate may have to pay U.S. estate tax on the property after your death. The U.S. imposes its estate tax on all assets owned by Canadians that it considers to be U.S. property, which includes real property such as vacation homes and may include other items such as furniture. In addition, shares in U.S. corporations and U.S. Government Savings Bonds are considered U.S. property even if the certificates are kept in Canada. US tax rules have to be renewed periodically so care shoudl be taken as to the current and prospective tax treatment.

♦ From a Canadian income tax perspective, you don’t have to be legally married to be considered 'married' or having a spouse, since the meaning of spouse includes a common law spouse. This could affect social programs including the amount of your GST/HST credit and other credits, and restrict your ability to claim the equivalent -to-married credit for a dependent family member.

♦ If you turn 72 this year you will have to decide what to do with your RRSP before the end of this year. If you wish to have some control over the investments, you may want to  purchase a registered retirement income fund (RRIF). If you'd rather have a steady monthly income, consider purchasing an annuity.

♦ There are no estate or gift taxes in Canada, generally gifts may be given without tax implications. The attribution rules may, however, apply in certain circumstances to cause the income to be taxed in the hands of the gift giver. A taxable capital gain can also arise on a gift but are not subject to attrbution.

♦ If you are self employed and work out of your home and move to a new home more than 40 kilometres away, a Tax Court of Canada decision means that you may be able to deduct your moving expenses for Canadian income tax purposes in the same way as an employee who moves to take a new job or an employment transfer.

♦ You can extract income from your corporation in a number of ways including; you can take a salary or bonus, which is deductible to your corporation, you can declare a dividend out of after tax profits, you can repay Shareholder Loans, and yuo can pay ampounts from notional tax balances such as Capital Dividend Account (CDA) to name a few.

♦ For a home based corporation to deduct rent related expenses you need to charge "rent" to your corporation. The amount is taxable to you, but it should be reduced by the equivalent amount which you have paid such as utilities or property taxes.

♦ Tuition fees included in your non refundable tax credits for Canadian income tax purposes include fees paid to attend a Canadian university or college; fees for courses taken to obtain or improve occupational skills at an institution approved by the Minister of Human Resources Development (if you're 16 years or older); fees paid for full-time attendance at most universities outside of Canada if the course is more than 13 consecutive weeks long and leads to a degree; fees paid to post-secondary institutions in the United States if you lived in Canada near the border and commute to the university or college. You will require the precribed form T2202A for domestic educational amounts and TL11A for all others.

♦ The purchase price paid for a domain name (URL) may not be immediately deductible for Canadian income tax purposes dependant upon the fact pattern. It may constitute an Eligible Capital Expenditure (ECE) in which case only 75% of the purchase price can be deducted at a rate of 7% per annum.

♦ To maximize the $750,000 capital gains exemption (CGE) from Canadian income tax on sale of qualifying small business shares (QSBC) available to every individual, you may consider having your spouse and adult children invest in the corporation to multiply the availability of the exemption. Be careful as share ownership/control may inadvertetly 'associate' other Canadian Controlled Private Corporation's (CCPC's) resulting in a shared Small Business Deduction (SMD).

♦ If you’re creating a stock option in your Canadian corporation for a shareholder, be sure to grant the same rights to all of the other shareholders of the same class. Otherwise, the stock option will be considered to be a taxable benefit for Canadian income tax purposes to the shareholder. Generally, these must be issued by virtue of being an employee and not a shareholder. 

♦ RRSP’s are normally available to be seized by your creditors in satisfaction of your debts. If liability issues are of concern to you consider a life insurance RRSP which is normally exempt from seizure by your creditors.

♦ A class action, Deanne Ho-A-Shoo, was recently commenced against the federal government in the Ontario Superior Court, seeking recovery of interest paid under section 160 of the Canadian Income Tax Act. Section 160 allows the Canada Revenue Agency (CRA) to pursue family members and others who receive property without paying Fair Market Value (FMV), from a person who owes tax at the time of the transfer. In the past the Canada Revenue Agency (CRA) has sought to recover not only the value of the property, but also interest on that amount. In the 1998 Algoa Trust case, the Court held that interest could not be assessed on a section 160 liability based on the Fair Market Value (FMV) of the property transferred, but the Canada Revenue Agency (CRA) has not taken steps to pay back interest collected improperly.

♦ A new taxation year for Canadian income tax purposes is deemed to have started when a 'change in control' of a corporation takes place. If your corporation is about to undergo a change in control it will shorten the carry-forward period of your unused losses and may cause their expiry. It may be possible to devise a mutually beneficial tax plan with the purchaser by billing before the sale for services to be rendered after the change in control in order to generate income to absorb the unused losses before they expire.

♦ Repayable income tax-free RRSP withdrawals (Life Long Learning Plan) can now finance full-time training or education for a taxpayer or spouse. Students in full-time training or post-secondary education or their spouses may withdraw up to $10,000 per year from their RRSP's over a four-year period, as long as the total amount does not exceed $20,000. The amount withdrawn from the RRSP must be repaid in equal installments over 10 years or included in income for Canadian income tax purposes.

♦ If you're being temporarily transferred due to your employment and receive a housing allowance to pay for your lodgings while you're away, the allowance will normally be considered a taxable benefit for Canadian income tax purposes. However, the allowance will not be included in your taxable income if it is for board and lodging at, and transportation to, a temporary work site that is more than 80 km from your home or a "remote work site" that is remote from any established community. To qualify your regular home must be available for your occupancy. If you rent it out, the allowance will be subject to income tax.

♦ If your company owns or leases an aircraft for business purposes and it makes a flight for the primary purpose of providing free or subsidized travel for the personal benefit of an employee or shareholder, a taxable benefit for Canadian income tax purposes will result for the employee or shareholder. The amount of the income tax benefit is usually computed as the cost of a regular first class ticket to the same destination. Special care to this issue and similar issues to avoid S.15(1) and S.15(2) to avoid the potential for double taxation.

♦ If you are a Canadian citizen with a US green card and both a US and Canadian residence, electing to pay Canadian income tax under the Canada-US income tax treaty may jeopardize your green-card status. Check the latest Canada-US Tax Treaty for detailed information.

♦ The Canada Revenue Agency has changed its policy on employer payment of professional membership fees. Employers can pay such fees on behalf of employees, without triggering a taxable benefit for Canadian income tax purposes, if the employer is the primary beneficiary of the payment. The previous policy was that such payments were a taxable benefit unless the employee's membership was a condition of employment.

♦ The child care expenses you can deduct on your Canadian income tax return include more than day care costs and the nanny's salary. Also deductible are fees for certain baby-sitting expenses, day camps, boarding schools, pre-school fees and summer camps. Also, a portion of your private school fees may be classified as daycare.

♦ Taxpayers who litigate for wrongful dismissal, including damages for mental distress and other non-financial matters, should try to ensure that the original statement of claim, and minutes of settlement include a detailed breakdown of the settlement's components to demonstrate that some or all of the settlement is not subject to Canadian income tax.

♦ If you are contemplating a contribution to a Registered Education Savings Plan (RESP) for your child to take advantage of the new Canada Education Savings Grant (CESG) program, your child will need a Social Insurance Number (SIN) before the RESP plan administrator can apply for the Canada Education Savings Grant (CESG).

♦ If you are self-employed, you may be allowed to deduct from your Canadian income tax return the costs of attending up to two conventions in a year in connection with your business or profession.

♦ If you spend more than 183 days in a year living in the United States (with a portion of your time in the US in the previous two years counting towards this total) you could be deemed a US resident for tax purposes and may be required to file US income tax returns, however the Canada-US tax treaty may provide you with some relief. However, the Treaty does not cover State Tax legislation.

♦ Automobile parking provided to employees may result in a taxable benefit to the employee, requiring an inclusion on their Canadian income tax return and T4 slip. The taxable amount is the fair market value of the parking less any amount the employee pays for the space. If fair market value can't be determined, such as parking in a mall, no taxable benefit would generally result.

♦ You may want to consider naming your estate rather than a charity as an RRSP or RRIF beneficiary otherwise no tax credit will be available to offset the Canadian income tax your estate will have to pay for the amount of the donation. By leaving instructions in your Will that the money should be transferred to one or more named charities you will ensure that your estate gets the benefit of the tax credit for your donation. RRSP and RRIF donations from estates can generally be transferred to a charity without incurring any tax and can be claimed by your estate for a tax credit of up to 100% of your income in that year.

♦ If you own your own company and you are retiring to leave it for others to carry on, you may be able to arrange for the company to pay you a reasonable retiring allowance which will be deductible to the company, and you may be able to transfer all or a portion of the allowance to your RRSP and claim the tax deduction.

♦ If you're planning to move out of Canada and you'll be selling your house, try to make the sale while you're still a Canadian resident. That way, you'll still be able to claim the principal residence exemption and avoid paying tax on the capital gain that may arise.

♦ If you make a spousal RRSP contribution instead of a personal one, the funds you contribute may be safe from attack by future creditors.

♦ If you drive an expensive company-owned car, especially if it's older than three years, the amount of the associated taxable benefit may make it more economical for you to purcvhae  the car from your employer and arrange for an offsetting increase in pay because your taxable benefit is based on the car's original cost and not its current value.

♦ If you are immigrating to Canada, it may be beneficial to sell investments with accrued losses before coming to Canada since it will be unlikely to use the foreign capital loss to offset other gains after you arrive in Canada, while gains that accrue on the investment after immigration will be taxable in Canada upon disposition.

♦ If you reside outside of Canada for part of the year but you continue to file your Canadian tax return as a Canadian resident, you may not be required to pay non-resident withholding taxes on the income from your Canadian investments.

♦ If you are setting up a new business, any start-up losses incurred by a corporation will not be personally deductible. If you anticipate start-up losses, and liability is not a significant issue or concern, you may consider starting your business as a sole proprietorship or partnership and only incorporate once you become profitable.

♦ When drafting your Will, you may be able to carry out income splitting for your beneficiaries by setting up multiple testamentary trusts.

♦ When commencing or settling any litigation you should consider whether payments can be deductible, if you are the defendant, or non-taxable if you are the plaintiff.

♦ If you have been charged interest or penalties for late tax payments caused by reasons out of your control you can apply to have them waived under the Canada Revenue Agency's "Fairness" provisions. Delay by your advisors including your accountant will not qualify. 

♦ If you carry out research and development, including software development, you may qualify for an income tax credit (SRED) by filing the appropriate form  with the Canada Revenue Agency. It is highly recommended that you consult a professional on any SRED claims as all SRED claims are audited by the Canada Revenue Agency.

♦ Non-residents of Canada with Canadian resident children estate beneficaries,  should consider leaving property to an offshore trust for their children, rather than directly to the Canadian resident child. If you are contemplating becoing a resident of Canada for tax purposes, you should consider having a trust settled on your behalf before you become a Canadian resident