Canada Training Credit (NEW)
- Refundable tax credit to help working Canadians with cost of professional development.
- Credit lesser of eligible tuition and new notional account.
- Lifetime maximum of $5,000 which expires the year an individual turns 65 years of age.
- Eligible individuals will accumulate $250 each taxation year in a notional account.
Eligible Individuals:
- File a tax return for the year.
- Be at least 25 years old and less than 65 years old at the end of the year.
- Be a resident in Canada throughout the taxation year.
- Have net income under the third federal bracket $147,66 (for 2019) individuals.
Home Buyers Plan:
- Proposes to increase the withdrawal for first time home buyers from $25,000 to $35,000 ($70,000spouse/commonlaw partner) from their RSP.
- Withdrawal must be repaid over 15 years, starting the second year following the year in which the withdrawal was made.
- Individuals experiences a marriage break down, the proposals will now allow these individual to qualify as a first time home owner to access of $35,000 from their RRSP to purchase a home.
Change in Use of Multi-Unit Residential Properties
- Property changes use from an income producing to principal residence or vice versa, the Income Tax Act deems the taxpayer to haven disposed of and reacquired the property at fair market value.
- The taxpayer can make election request a tax deferral until the property is sold if an income has produced an inherent gain.
- NEW: This multi-unit residential properties such as duplexes the elections are extended to these properties as well.
Additional Options in Creating Retirement Income from Registered Plans:
- Advanced Life Deferred Annuities (ALDA) For:
RRSP, RRIF, deferred profit-sharing plan (DPSP), pooled registered pension plan (PRPP) and defined
contribution registered pension plan (RPP) . - Subject to a lifetime ALDA limit equal to 25% of the value of all property in the plan and a lifetime ALD
dollar limit of $150,000 from all qualifying plans. - 1% per month penalty tax will apply if ALDA purchase exceed their limits
- Variable payment life annuities (VPLA) For:
PRPP and defined contrition (RPP)
- Provide payments that vary based on the investment performance of the underlying annuities fund and on the mortality expectation of VPLA annuitants.
Registered Disability Savings Plan – Cessation of Eligibility for the Disability Tax Credit:
- Proposed to eliminate the medical certification requirement including the requirement to close the account when the individual loses the disability tax credit.
- Help to retain the grants and bonds in the account that would under the current rules be required repaid to the Government.
Refining Mutual Fund Trust Taxation:
When a mutual fund trust disposes of investments to fund a redemption any accrued capital gain on the investment is realized by the trust and is subject to tax. The unit holder may again be taxed upon the disposition of the units on any accrued capital gains.
- Deny a tax deduction to the mutual fund trust to extent that capitals gains triggered in the trust are greater
than the capital gain realized upon the redemption of units. - Deny a tax deduction to the mutual fund trust in respect of any allocation made to a unitholder on a
redemption if the allocated amount is ordinary income and the unitholders proceeds are reduced by
allocated amount.
Carrying on Business in a Tax-Free Savings Account:
Proposed that the joint and several liability for taxes owing on income earned from carrying on business within the TRFS also be the responsibility of the TFSA holder and not just the trustee.