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Recent Articles

Planning for the Family Vacation Property

Many Canadians appreciate the benefits and joys of owning a cottage, cabin or chalet (“vacation property”), and wish to pass the ownership and enjoyment to the next generation. Designing a succession plan for the future ownership of your family vacation property can be challenging, especially because these properties often hold tremendous sentimental and monetary value. In addition, it is likely that more than one child may want ownership; however, the asset cannot be divided. As a result, it’s important that your estate plan take this asset into consideration to ensure that it is properly accounted for and, if applicable, transitioned based on the needs and desires of the family.

How Investment Income is Taxed

When it comes to investment income, all is not equal after tax. Knowing how tax rules affect your investments is essential in order to maximize your after-tax return. This publication explains the taxation of investment income held in a taxable account as it pertains to an individual resident in Canada.

New Tax Reporting Requirements for Trusts

Trusts are powerful instruments in tax and estate planning. Broadly speaking, a trust is a relationship between a settlor and a trustee in which the trustee holds property transferred by the settlor for the benefit of beneficiaries specified by the settlor. Using this basic framework, a variety of arrangements are possible and significant planning objectives can be met. This article focuses on the tax reporting requirements for trusts, including forthcoming changes to these tax reporting requirements for trust taxation years ending on, or after December 31, 2022.

A Guide to the Principal Residence Exemption

One of the most important tax breaks offered to Canadians is the “Principal Residence Exemption” which can reduce or eliminate any capital gain otherwise occurring for income tax purposes on the disposition (or deemed disposition, such as upon death) of your home. In general, a resident of Canada who owns only one housing unit, which is situated on land of one-half hectare or less, and which has been used since its acquisition strictly as their residence, will qualify for the principal residence exemption. Although simple in concept, in situations other than the one described above the tax rules governing the exemption can quickly become complicated, particularly when more than one residence is owned by a family unit.

Pension Income-splitting Provides Tax Planning Opportunities for Couples

The pension income-splitting rules provide an effective, yet simple, strategy to lower family taxes. Being able to split pension income provides an opportunity for couples to reduce their overall family tax bill by taking advantage of a spouse’s or common-law partner’s lower marginal tax rate where retirement incomes are disproportionate.

Reduce Your Taxes with a Prescribed Rate Loan

A popular tax strategy involves the use of a prescribed rate loan to split income amongst family members. In light of the recent announcement by the Canada Revenue Agency of the forthcoming increase in the prescribed interest rate from 1% to 2%, effective July 1, 2022, you will need to act quickly to lock in the current low rate of 1% to take advantage of the enhanced income-splitting benefits of this strategy.

2022 Federal Budget Review

Finance Minister Chrystia Freeland presented her second Budget (and first from the re-elected minority Federal Liberal government) in the House of Commons on April 7, 2022.

Digital Security: Keeping Your Personal and Account Information Safe

At BMO, we take your security seriously. We are committed to respecting and protecting the privacy and confidentiality of the personal information you entrust to us. It is also important to know how to keep your information secure. This article provides a few simple ways you can protect yourself online, as well as some key reminders for detecting fraud. Please be reminded that these are suggestions and we recommend that you speak to a technology professional about your digital security.

A Look at Recent Changes to Ontario Estate Law

If making changes to your estate plan is on your “to-do list,” it is important to be aware of several amendments that were introduced as of January 1, 2022 to estate legislation in Ontario. The Ontario government recently passed the Accelerating Access to Justice Act (“Bill 245”) which includes changes to the way Wills are interpreted and how your Will can now survive you after saying “I Do” at the altar.

Considering RESPs as Part of Your Estate Plan

Registered Education Savings Plans (“RESPs”) are popular vehicles chosen by parents, grandparents, and others to help set aside funds for a child’s post-secondary education. However, an RESP is an asset too often overlooked by individuals when it comes to estate planning. This article provides an overview of important estate planning considerations for RESP subscribers.

Wills That Work

Estate planning is an essential component of a successful wealth management program. A good estate plan will provide you with the peace of mind that comes from knowing your family will be taken care of, and your financial affairs will be in order and administered according to your wishes. An important key element of any estate plan is a Will.

Tax Planning Strategies

Tax Planning Involving Family Trusts

Trusts are often used in tax and estate planning because of the flexibility they offer over the control, management and distribution of appreciating assets. In an estate planning context, trusts can be used to provide control and protection of assets, reduce probate fees at death or serve as a Will substitute, and as a vehicle to transfer wealth to future generations.