NOTICE OF WAYS AND MEANS MOTION TO AMEND THE INCOME TAX ACT
The Federal Government has tabled a notice of “Ways and Means Motion” to amend the income tax act. This is the formal procedure that the Federal Government uses to initiate changes in tax law.
How does this affect you?
- Starting Jan 1, 2016, the personal tax rate on income over $200,000 will increase from 29% to 33%, and the tax on income between $44,701 and $89,401 will decrease from 22% to 20.50%.
- TFSA contribution limit will be rolled back to $5,500 from $10,000 effective Jan 1, 2016. There will not be any change to the 2015 limit of $10,000. TFSA contribution will be indexed to inflation starting 2016. TFSA contribution room to Dec 31, 2015 is $41,000.
- CCPC investment income surtax to go up from 6 2/3% to 10 2/3%, this increases the tax on investment income by 4%.
- Part IV tax increases from 33 1/3% to 38 1/3%. That is a big 5% increase. There will be a corresponding increase in the dividend refund rate as well, from 33 1/3% to 38 1/3%.
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The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.