Income Trusts
Posted By Dan White On March 12, 2008 @ 4:05 pm In Tax Tips | No Comments
- Provincial taxation of income funds. Under current law, income trusts will become subject to a special “SIFT” tax on distributions made by them after 2010 (or before then if they breach “normal growth” guidelines.) The Budget proposes that the provincial component of the SIFT tax (that will be paid over to the provinces) will be based on actual provincial corporate tax rates in the provinces to which the distribution is allocated (under a formula giving equal weight to relative province-by-province payrolls and revenues) rather than being a flat rate of 13% (as previously announced). (However, the Quebec tax rate will be treated as nil for these purposes given that Quebec separately imposes a SIFT tax.)
- What this means is you can’t trust the income trusts.
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