ARTICLE · 01 MARCH 2018

How Will The New Passive Investment Income Rules Actually Affect CCPCS?

Collins Barrow National Incorporated

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After months of public consultation, speculation and concern, the rules regarding Passive Investment Income have finally been unveiled.

CanadaTax

John Oakey

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OTTAWA, ON – After months of public consultation, speculation and concern, the rules regarding Passive Investment Income have finally been unveiled. In today's 2018 Federal Budget release the government announced that passive investment income over a certain limit will now reduce a Canadian-controlled private corporation's (CCPC) small business deduction.

This isn't quite the news we were expecting. The corporate tax changes presented by the federal government for public consideration throughout 2017 were significantly more punitive, and would have resulted in a non-refundable tax burden. That said, for some high-net worth individuals and corporations, who are still actively working and have sizable corporate investments, this new regulation may cost a pretty penny.

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