ARTICLE · 11 DECEMBER 2015

Federal Tax Rate Increases For Canadians

Moodys Private Client Law LLP

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On December 7, 2015, Canada's new Finance Minister, Bill Morneau, tabled measures to reduce the federal individual income tax rate for the $45,282 to $90,563 tax bracket from 22% to 20.5%.

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On December 7, 2015, Canada's new Finance Minister, Bill Morneau, tabled measures to reduce the federal individual income tax rate for the $45,282 to $90,563 tax bracket from 22% to 20.5%, and introduced a new 33% top rate bracket for taxable income over $200,000, effective Jan. 1, 2016. Additionally, the Tax-Free Savings Account (TFSA) annual contribution limit will be rolled back to $5,500 after 2015. While these amendments were not unexpected as they were part of the Liberal's election platform, the proposal also includes subtle but important consequential amendments affecting tax rates/credits for trusts and estates, "kiddie tax", charitable donations, corporate refundable taxes on investment income for Canadian-controlled private corporations (CCPCs), and Part IV tax. This short blog summarizes these changes and offers some thoughts.

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