It's been a week of near-daily policy announcements on small-business taxes. Here's a summary with the latest:
- The federal government will move forward on an election pledge to lower the small business tax rate to 9% from 10.5% by 2019
- Plans to stop allowing income splitting for family members not active in a business will move forward; Finance Minister Bill Morneau said the proposal will be "simplified"
- The government will not move forward with proposed measures to limit access to the Lifetime Capital Gains Exemption
- Proposed rules to discourage using corporations for passive investing will move forward, but a new threshhold will allow $50,000 in income a year to be exempt from the new higher tax. For example, that means $1 million held inside a corporation could earn a 5% rate of return and that income would be taxed under the old rules
- The government is scrapping proposed rules meant to curtail the conversion of income to capital gains, which caused concern in relation to intergenerational transfers and insurance policies held inside corporations
- Morneau promised incentives will be maintained for venture capitalists and angel investors. Consultations will be held on how this can be achieved
For more on small-business tax changes, click here.