Top Ten New Tax Breaks for 2007
by Colin Yip, CA

As a result of the 2007 Federal Budget, there are a number of planning opportunities for you.

1. Children’s Fitness Tax Credit – Non-refundable tax credit for up to $500 per child
   • For each child under 16
   • Ongoing (minimum 8 weeks – one session per week, or 5 consecutive days for camps)
   • Supervised, suitable for children, significant amount of physical activity
   • Date the fees are paid determines the claim year
   
   
2. Child Tax Credit of $2,000 per child
   • Non-refundable tax credit for children under 18


3. Pension-splitting between spouses
   • Allocate maximum of 50% of eligible pension income
   • Eligible pension income must be subject to the pension tax credit
   • Joint annual election must be filed with tax return
   • Consider impact on OAS and loss of spouse tax credit


4. RRSP Improvements
   • 2007 – $19,000
   • 2008 – $20,000
   • Increase the age to convert RRSP, RPP, PPSP to age 71 from 69
   • Can make RRSP contributions at age 70 in 2007 and age 71 in 2008


5. Increased Lifetime Capital Gains Exemption from $500,000 to $750,000
   • For the sale of small business corporation shares and qualified farming and fishing properties


6. Increase in the threshold require to pay Personal Income Tax Installments from $2,000 to $3,000 effective for the 2008 year



7. Non-Capital Loss Carry Forward extended to 20 years



8. GST thresholds have increased for the 2008 year
   • Threshold for quarterly installments from $1,500 to $3,000
   • To be eligible to file annually, the ceiling on revenue is increased from $500,000 to $1,500,000


9. Corporation Small Business Limit increases from $300,000 to $400,000



10. Eligible dividends reduces the total tax rate on dividends paid out of high rate retained earnings
    • Reduced personal tax rate
    • Applies to dividends from public companies and dividends from Canadian Controlled Private Company paid out of income not subject to the Small Business Limit





This article was prepared by Colin Yip for the advisors of Arbutus Financial Services / Dundee Private Investors Inc. (“Dundee Private Investors”), a DundeeWealth Inc. Company. Although the advisors of Arbutus Financial Services are registered Mutual Fund Representatives with Dundee Private Investors, this is not an official publication of Dundee Private Investors and the views (including any recommendations) expressed in this article have not been approved by, and are not necessarily those of, Dundee Private Investors.