On December 13, 2017, the Government released updated proposed
legislation in respect of the tax on split income
("TOSI"). This legislation is a revision to the proposed
changes introduced in July, 2017, and implements a number of
changes that the Minister of Finance suggested in October would be
forthcoming (for our October article see
here).
Current TOSI
TOSI as currently drafted limits the ability to split income
with minor children for the purpose of taking advantage of the
child's lower marginal tax rates. Any "split income"
of the child is taxed at the highest marginal rate, eliminating any
benefit from splitting the income.
TOSI currently applies to income earned by children under 18
from certain sources, including dividends on shares (other than
publicly listed securities), shareholder benefits, or income earned
by a partnership or trust where the income can reasonably be
considered to be derived from the provision of property or services
of a related
