| 1) |
Pension Income Splitting
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| |
Beginning with 2007 income
tax returns, Canadian residents will be able to allocate to
their resident spouse, up to one-half of their income that
qualifies for the existing pension income tax credit.
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Pension splitting can and
will affect the individual's net income, thereby affecting
such tax credits as the age amount, spousal amount and
repayment of Old Age Security.
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Therefore pension splitting
should be made with care and the assistance of a
professional.
|
| 2) |
New Child Tax Credit
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2007 Budget introduced a
non-refundable Child Tax Credit for parents.
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The new Child Tax Credit
will be calculated by multiplying the lowest personal income
tax rate for the year (15.5% in 2007) by $2,000 for each
child. Taxpayers will claim the new child tax credit when
filing their 2007 income tax return.
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Taxpayers can arrange for a
reduction in tax withholdings starting July, 2007 or use the
non-refundable tax credit to lower their tax owing, or
increase their refund, whichever applies to them.
|
| 3) |
There have been some changes
to the capital cost allowance rates for some asset classes.
Computer equipment has increased from 45% to 55%. Buildings
used for manufacturing and processing has increased from 4%
to 10%. Other non-residential building rates have increased
from 4% to 6%.
|
| 4) |
The GST rate will be reduced
from 6% to 5% effective January 1, 2008. Transitional rules
will be similar to those implemented when the GST was
reduced to 6% from 7%.
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There are no changes to the
phase-out for the new housing rebate on houses between
$350,000 and $450,000 with a full loss of the rebate at
$450,000.
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With respect to the quick
method, the rate will be reduced to 3.6% of GST-included
revenues, from the current rate of 4.3%.
|
For more information please call Joan Granger at (250) 748-6256
at McKinnon Germann Granger.
