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What is optimal capital structure?  Read Part 2 of this blog series where we discuss the optimal capital structure and why it is vital in your valuation

DFK Tax Digest
2023 Issue Two

May 25, 2023

2

In DFK Tax Digest 2023 – Issue Two:

  • The New Underused Housing Tax – You Are a Canadian Citizen So How Does It Affect You? Hopefully, you have heard about the new Underused Housing Tax (“UHT”) by this point. You may be wondering what it means for you, a Canadian citizen. The basic premise is to tax non-Canadians owning residential property in Canada which is not being used in a way that benefits our society or assists in resolving our current housing crisis. Unfortunately, as with so many new legislative changes the government has written the legislation to avoid any loopholes. In so doing, they have created filing requirements in many cases where no tax will be payable. Even where there is no UHT payable, failure to file the return carries potential $5,000 (individual) or $10,000 (corporate/partnership) penalties….
  • Budget Update: Bill C-208 and Intergenerational Transfers: Bill C-208 was a private members bill that was passed in June of 2021. It was introduced to allow similar tax treatment on intergenerational family transfers of Canadian Controlled Private Corporations (CCPC) as an arm’s-length sale. Before C-208, if you sold a company to an arm’s-length company, the gain was taxed as a capital gain. However, if you sold a company to a company controlled by certain relatives, the gain was recharacterized and taxed as a dividend…
  • Understanding Changes to Canada Revenue Agency “CRA” Administrative Policy for Certain Taxable Benefits: In this blog we will cover the changes that the CRA recently made to its administrative policy for certain taxable benefits related to gifts, awards, and rewards, as well as virtual social events. With more employees working from home since the pandemic, the number of gifts and awards given to employees has been increasing. Thankfully, the CRA lately decided to introduce some flexibility to its administrative policy to allow employees to receive more of these benefits tax-free. Yet, employers are still required to do some work and abide by additional guidelines to keep these benefits tax-free for their employees…