Further to our news release on October 16, 2017, the Federal Liberal Government has made their second announcement this week regarding the tax proposals specifically regarding passive investment income.
Draft legislation for the passive income will be included in the 2018 budget. It is of no surprise that the announcement lacks details and we will have to wait until draft legislation is released but to summarize this announcement:
- Investments already in corporations will not be impacted including future income
- Reserve funds for contingencies or future investments will not be impacted
- It appears the first $50,000 of passive investment income earned on new investments made will not be subject to new tax rules – no mention of effective date or cut-off date for new investments
- Incentives will be put into place to ensure angel investors and venture capitalists are not impacted
The release does not mention an effective date or what the new tax regime on investment income will look like.
We will keep you updated as more information is made available.