Updated “income sprinkling” proposals for private corporations
“Updated proposals related to “income sprinkling” have now been released by the Department of Finance. Income sprinkling generally refers to the transferring of income that would otherwise be taxed in the hands of one taxpayer at a relatively high tax rate to another taxpayer at a lower tax rate. This approach is commonly implemented to reduce the overall tax burden for a family.
“The modifications to the proposals originally introduced on July 18, 2017 include a series of so-called “bright-line” tests to exclude certain individuals from the tax on split income.”