A leader in the timely and thorough preparation of tax information on a range of issues, Invesco Trimark has been providing a customized summary of the Federal Budget for over a decade. Prepared from within the Budget lockup in Ottawa by Doug Carroll, Invesco Trimark’s Vice President of Tax & Estate Planning, the 2010 edition selectively focuses on several specific budget elements that will have the biggest impact on your personal finances and investments.
True to the comments from the government in the weeks leading up the release of Federal Budget 2010, there are very few broad-based tax relief measures. There are, however, some targeted measures that will be welcome assistance in certain family situations.
Personal income tax measures
Rates and brackets
The bracket index factor from 2009 to 2010 will be the calculated 0.6%
The rates at each bracket level remain unchanged
Rate 2009 2010
15% 10,320 10,382
22% 40,726 40,970
26% 81,452 81,941
29% 126,264 127,021
Delivery of family support amounts
Universal Child Care Benefit (UCCB) for single parents
Single parent may include UCCB in own income, in income of dependant for whom an Eligible Dependant Credit is claimed, or in income of child for whom the UCCB is paid
Benefits entitlement – Shared custody
Each parent would be able to claim one-half of the annual entitlement that they would receive if they were the sole eligible individual
Education and disability support
Rollover of RRSP proceeds to a Registered Disability Savings Plan (RDSP)
Allow rollover of a deceased individual’s RRSP or RRIF proceeds to the RDSP of a financially dependent infirm child or grandchild
Carry forward of RDSP Grants and Bonds
Allow a 10-year carry forward of Canada Disability Savings Grant (CDSG) and Canada Disability Savings Bond (CDSB) entitlements
Provincial payments into Registered Education Savings Plans (RESPs) and RDSPs
Clarifying that provincial support programs are treated the same as federal grants and bonds, and will therefore not attract or reduce federal grants and bonds
Charities: Disbursement quota reform
Reform the disbursement quota by:
repealing the charitable expenditure rule;
modifying the capital accumulation rule; and
strengthening related anti-avoidance rules for charities.
Other income matters
Employee stock options
Changes to the rules governing such options, including clarification of tax-deferral elections and remittance requirements
U.S. Social Security benefits
Reinstate the 50% inclusion rate (from 85% currently) for Canadian residents who have been in receipt of U.S. Social Security benefits since before January 1, 1996
Mineral exploration tax credit
Extend eligibility for the mineral exploration tax credit for one year, to flow-through share agreements entered into on or before March 31, 2011
Non-resident trusts
Simplify and better target existing proposals in several ways, including limiting attribution to resident contributors to their proportionate share of the trust’s income
Tax administration
Information reporting of tax avoidance transactions
Public consultation on proposals to require the reporting of transactions involving contingent fees, advisor confidentiality or contractual protection for taxpayer
Online notices
Enable CRA to post certain documents on My Account and My Business Account secure online platforms, whereas presently these must be delivered by mail or in person