Most business owners are certainly happy that the modifications to the taxation of small businesses that are part of the federal 2018 budget are not as drastic as those announced in 2017. This being said, the new tax rules will make passive investment income earned in a business less interesting for some small business owners. They may therefore be looking for more advantageous investment alternatives. They should consider Individual Pension Plans (IPPs) and Retirement Compensation Arrangements (RCAs).
This document presents our views on the broad impact of the new tax rules and should not be considered as tax advice. We will be pleased to work with tax and investment advisers to further assess whether an IPP or an RCA can help to maximize their clients’ retirement savings. A business owner must receive or start receiving T4 income to consider these retirement plans.