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ARTICLE · 13 APRIL 2023

Budget 2023: Alternative Minimum Tax

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Budget 2023 proposes the first major changes to the Alternative Minimum Tax (the "AMT") since its introduction in 1986 with the stated goal of "ensuring the wealthiest Canadians pay their fair share."

CanadaTax
Steven Sitcoff
Steven Sitcoff
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Budget 2023 proposes the first major changes to the Alternative Minimum Tax (the "AMT") since its introduction in 1986 with the stated goal of "ensuring the wealthiest Canadians pay their fair share."

The AMT is a parallel tax system aimed at ensuring that high income earners cannot unduly reduce their tax liability by taking advantage of certain deductions or other tax incentives. Essentially, individuals and certain trusts are required to calculate their annual income tax liability under both the regular method and the AMT, and they pay the higher of the two. In Budget 2023, the Federal Government indicated that trusts that are currently exempt from the AMT will continue to be exempt (for example, certain spousal or common law partner trusts, alter ego trusts, mutual fund trusts, related segregated fund trusts, master trusts and employee life and health trusts). Further, an examination will be undertaken to determine whether additional trusts should be exempt

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The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

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