![]() |
![]() |
![]() |
![]() |
![]() |
![]() |
![]() |
![]() |
![]() |
||||
![]() |
||||||||||||
![]() |
![]() |
![]() |
![]() |
![]() |
||||||||
![]() |
![]() |
![]() |
||||||||||
|
||||||||||||
TAXFlash News from IncomeTaxCanada.net
:: CCRA allows five-year loans at prescribed interest rates for home puchase loans and home relocation loans
:: In my last article I discussed an income splitting technique that took advantage of CCRA’s historically low interest rate, known as the “prescribed rate”. Recall, CCRA sets this rate each quarter (January 1, April 1, July 1 and October 1) throughout the year based on the average interest rate on 90-day treasury bills during the first month of the preceding quarter. Currently, the prescribed rate is a mere 2 per cent, although, the rate is set to rise to 3 per cent at the end of this month. With interest rates seemingly on the rise, further increases in the prescribed rate are anticipated. Many taxpayers will have unwillingly encountered CCRA’s prescribed rates when they’ve paid their taxes late or paid insufficient instalments throughout the year. In each of these cases CCRA, uses the prescribed rate plus an extra 4 per cent “bonus” (call it a super prescribed rate) to assess interest on the amounts owing but unpaid. Now before you get to thinking that the prescribed rate is nothing but bad news there are situations where taxpayers can put the prescribed rate to good use. In general, if an employer provides an employee with a low-interest or no-interest loan during the year, an interest benefit must be included in the employee’s income. This benefit is calculated using you guessed it the prescribed rate of interest. As I’ve already noted, the prescribed rate changes quarterly so the amount of the benefit changes as interest rates change, albeit in a slightly delayed fashion due to the method use to determine the prescribed rate.
CCRA makes this a very difficult road to travel
|
![]() |
Free Tax Advice Article Submitted to Income Tax Canada.net exclusively by Jim Maroney
CA Canadian Chartered Accountant with Brown, Andrews & Maroney in Maple Ridge, BC, Canada
Official details about this and other topics on income taxes can be found in English & Francais at www.ccra-adrc.gc.ca
Canada Revenue Agency (CRA) / l'Agence du revenu du Canada (ARC) offers bilingual information on its website for
NetFile, deductions (benefits - credits), interpretation bulletins, income tax forms (returns) and tax tables (brackets).
Income tax information offered by www.IncomeTaxCanada.net is done so without endorsement by Canada Revenue Agency (CRA) - l'Agence du Revenu du Canada (ARC) (formerly Canada Customs and Revenue Agency - l'Agence des Douanes et du Revenu du Canada CCRA-ADRC and formerly Revenue Canada Revenu du Canada) or any Canadian government agency. The free advice is of a general nature for Canadian taxpayers seeking legal ways to reduce their personal and small business income taxes payable to the federal and provincial (or territorial) governments in Alberta, British Columbia, Manitoba, New Brunswick Newfoundland-Labrador, Northwest Territories, Nova Scotia, Nunavut, Ontario, Prince Edward Island, Quebec, Saskatchewan or Yukon. Specific taxation situations vary from taxpayer to taxpayer, province to province, territory to territory. The free tax advice here is only a general guide. Canadians should always seek individual guidance on accounting rules and tax laws from knowledgeable accountants and lawyers. To prepare your income tax return online and NetFile your Canadian income taxes electronically in English or Francais, please visit www.ufile.ca or www.impotexpert.ca websites. Additional information on financial products and services for Canadians can be found at www.CanadianCreditCenter.com.