Announcements

 

Get caught up with Andrews & Co.

Whether it's tax season or welcoming new team members, we have a lot going on at our firm. We'll keep you connected by sharing our ongoing news.

  • INCOME SPRINKLING: Where Are We Now?
    Posted

    On December 13, 2017, the Department of Finance released a number of updates relating to the income sprinkling proposals (originally announced on July 18, 2017). Below is a summary of the proposals as they are currently drafted.

    Individuals that receive certain types of income derived from a “related business” will be subject to Tax on Split Income (TOSI) unless an exclusion applies. TOSI is subject to the highest personal tax rate with no benefit of personal credits. Commencing on January 1, 2018 TOSI will potentially apply in respect of amounts that are received by adults, not just those under 18 years. The application of TOSI to individuals under age 18 (commonly known as the “kiddie tax”) would not generally change.

    Income Streams at Risk

    Private corporation dividends, partnership allocations, trust allocations, capital gains, and income from debt may all be subject to TOSI.

    Related Business

    A related business includes any business, where another individual related to the recipient of income does any of the following:

    • personally carries on the business (this means income from a sole proprietorship to a related person can be subject to TOSI);
    • is actively engaged in the business carried on by a partnership, corporation or trust;
    • owns shares of the corporation carrying on the business;
    • owns property the value of which is derived from shares of the corporation having a fair market value not less than 10% of the fair market value of all of the shares of the corporation; or
    • is a member of a partnership which carries on the business.

    The definition is broadly drafted to capture income derived directly or indirectly from the business.

    Exceptions and Exclusions

    Several exclusions from the TOSI rules for adult individuals have been introduced.

    Some exclusions depend on the age of the taxpayer at the start of the taxation year. Different rules apply to taxpayers at least 17 years of age at the start of the year (i.e. these exceptions are first available in the year the taxpayer turns 18) and to those at least 24 years of age at the start of the year (i.e. these exceptions are first available in the year the taxpayer turns 25). For the purposes of this analysis, the first age group will be referred to as those “over age 17” while the second group will be referred to as those “over age 24“.

    The exclusions are as follows:

    1. Excluded Business: A taxpayer over age 17 will not be subject to TOSI on amounts received from an excluded business. An excluded business is one where the taxpayer is actively engaged on a regular, continuous and substantial basis in either the year in which the income is received, or in any five previous years. The five taxation years need not be consecutive.

    An individual will be deemed to be actively engaged in any year where the individual works in the business at least an average of 20 hours/week during the portion of the taxation year that the business operates. A person not meeting this bright line test may also be “actively engaged” depending on the facts, but this will carry greater risk of challenge by CRA.

    1. Excluded Shares: A taxpayer over age 24 will be exempt from TOSI in respect of income received from excluded shares, including capital gains realized on such shares.
    2. Reasonable Return: TOSI will not apply to amounts which reflect a reasonable return.
      • For taxpayers over age 24, an amount which is reasonable is based on work performed, property contributed, risks assumed, amounts paid or payable from the business, and any other factors in respect of the business which may be applicable.
      • For taxpayers over age 17, but not over age 24, the rules are more restrictive. Only a reasonable return in respect of contributions of capital will be considered.
    3. Certain Capital Gains: Although TOSI will be expanded to apply to capital gains of interests in entities through which a related business is carried on, some gains will be excluded. For example, capital gains arising due to a deemed disposition on death. Also, capital gains on qualified farm or fishing property, or qualified small business corporation shares will generally be excluded from TOSI.
    4. Retirement Income Splitting: The TOSI rules will not apply to income received by an individual from a related business if the recipient’s spouse was age 65 in or before the year in which the amounts are received and the amount would have been excluded from TOSI had it been received by the recipient’s spouse.

     This new draft legislation is a substantial change from the current rules. The provisions are lengthy, complex and nuanced, and it is likely that additional concerns and challenges will be identified. It is uncertain whether there will be further changes, given the concerns which have already been identified, as well as the recommendations of the Senate Finance Committee released on the same date as these proposals.

     Action Item: Review whether your earnings may be impacted. Consider whether additional documentation should be kept to prove meaningful contributions and time worked. Also, restructuring of ownership or working relationships may be beneficial in some cases.

     

     This publication is produced by Andrews & Co. as an information service to clients and friends of the firm, and is not intended to substitute for competent professional advice. No action should be initiated without consulting your professional advisors.

    On December 13, 2017, the Department of Finance released a number of updates relating to the income sprinkling proposals (originally announced on July 18, 2017). Below is a summary of the proposals as they are currently drafted.

    Individuals that receive certain types of income derived from a “related business” will be subject to Tax on Split Income (TOSI) unless an exclusion applies. TOSI is subject to the highest personal tax rate with no benefit of personal credits. Commencing on January 1, 2018 TOSI will potentially apply in respect of amounts that are received by adults, not just those under 18 years. The application of TOSI to individuals under age 18 (commonly known as the “kiddie tax”) would not generally change.

    Income Streams at Risk

    Private corporation dividends, partnership allocations, trust allocations, capital gains, and income from debt may all be subject to TOSI.

    Related Business

    A related business includes any business, where another individual related to the recipient of income does any of the following:

    • personally carries on the business (this means income from a sole proprietorship to a related person can be subject to TOSI);
    • is actively engaged in the business carried on by a partnership, corporation or trust;
    • owns shares of the corporation carrying on the business;
    • owns property the value of which is derived from shares of the corporation having a fair market value not less than 10% of the fair market value of all of the shares of the corporation; or
    • is a member of a partnership which carries on the business.

    The definition is broadly drafted to capture income derived directly or indirectly from the business.

    Exceptions and Exclusions

    Several exclusions from the TOSI rules for adult individuals have been introduced.

    Some exclusions depend on the age of the taxpayer at the start of the taxation year. Different rules apply to taxpayers at least 17 years of age at the start of the year (i.e. these exceptions are first available in the year the taxpayer turns 18) and to those at least 24 years of age at the start of the year (i.e. these exceptions are first available in the year the taxpayer turns 25). For the purposes of this analysis, the first age group will be referred to as those “over age 17” while the second group will be referred to as those “over age 24“.

    The exclusions are as follows:

    1. Excluded Business: A taxpayer over age 17 will not be subject to TOSI on amounts received from an excluded business. An excluded business is one where the taxpayer is actively engaged on a regular, continuous and substantial basis in either the year in which the income is received, or in any five previous years. The five taxation years need not be consecutive.

    An individual will be deemed to be actively engaged in any year where the individual works in the business at least an average of 20 hours/week during the portion of the taxation year that the business operates. A person not meeting this bright line test may also be “actively engaged” depending on the facts, but this will carry greater risk of challenge by CRA.

    1. Excluded Shares: A taxpayer over age 24 will be exempt from TOSI in respect of income received from excluded shares, including capital gains realized on such shares.
    2. Reasonable Return: TOSI will not apply to amounts which reflect a reasonable return.
      • For taxpayers over age 24, an amount which is reasonable is based on work performed, property contributed, risks assumed, amounts paid or payable from the business, and any other factors in respect of the business which may be applicable.
      • For taxpayers over age 17, but not over age 24, the rules are more restrictive. Only a reasonable return in respect of contributions of capital will be considered.
    3. Certain Capital Gains: Although TOSI will be expanded to apply to capital gains of interests in entities through which a related business is carried on, some gains will be excluded. For example, capital gains arising due to a deemed disposition on death. Also, capital gains on qualified farm or fishing property, or qualified small business corporation shares will generally be excluded from TOSI.
    4. Retirement Income Splitting: The TOSI rules will not apply to income received by an individual from a related business if the recipient’s spouse was age 65 in or before the year in which the amounts are received and the amount would have been excluded from TOSI had it been received by the recipient’s spouse.

     This new draft legislation is a substantial change from the current rules. The provisions are lengthy, complex and nuanced, and it is likely that additional concerns and challenges will be identified. It is uncertain whether there will be further changes, given the concerns which have already been identified, as well as the recommendations of the Senate Finance Committee released on the same date as these proposals.

     Action Item: Review whether your earnings may be impacted. Consider whether additional documentation should be kept to prove meaningful contributions and time worked. Also, restructuring of ownership or working relationships may be beneficial in some cases.

     

     This publication is produced by Andrews & Co. as an information service to clients and friends of the firm, and is not intended to substitute for competent professional advice. No action should be initiated without consulting your professional advisors.

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  • Golf Day 2018
    Posted

    August 31st marked Andrews & Co.’s Annual Foreman Memorial Golf Tournament held at Rockland Golf Club.

    Staff enjoyed a round of 18 holes, dinner and many activities and 50/50 draws to raise funds for the ALS Society of Canada. Overall, as a firm, Andrews is proud to donate $1250 (surpassing our goal of $1000) to help fund ALS research this year!

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    August 31st marked Andrews & Co.’s Annual Foreman Memorial Golf Tournament held at Rockland Golf Club.

    Staff enjoyed a round of 18 holes, dinner and many activities and 50/50 draws to raise funds for the ALS Society of Canada. Overall, as a firm, Andrews is proud to donate $1250 (surpassing our goal of $1000) to help fund ALS research this year!

     

     

     

     

     

     

     

     

     

     

     

     

     

     

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  • Montebello Retreat Part 2
    Posted

    A few weeks ago the Hartel and Admin team had the chance to escape from the office and visit Fairmont le Chateau Montebello for a two day team bonding retreat. On the night of arrival staff enjoyed a spectacular BBQ at the Chateau. On Friday morning groups gathered for a team breakfast then split up into groups for different activities. Some participated in ATV’ing while others participated in 9 holes of golf which allowed teams to socialize and work together. In the evening all staff met for an amazing dinner at the local Italian restaurant.

     

    A few weeks ago the Hartel and Admin team had the chance to escape from the office and visit Fairmont le Chateau Montebello for a two day team bonding retreat. On the night of arrival staff enjoyed a spectacular BBQ at the Chateau. On Friday morning groups gathered for a team breakfast then split up into groups for different activities. Some participated in ATV’ing while others participated in 9 holes of golf which allowed teams to socialize and work together. In the evening all staff met for an amazing dinner at the local Italian restaurant.

     

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  • CONGRATULATIONS TO OUR NEWEST CPA
    Posted

    Andrews and Co is pleased to congratulate Adam Patrick on becoming a Chartered Professional Accountant.

    Adam is a great asset to the firm and is committed to providing accounting services and lasting relationships with our clients.

    We are very lucky to have him as part of our team!

    Andrews and Co is pleased to congratulate Adam Patrick on becoming a Chartered Professional Accountant.

    Adam is a great asset to the firm and is committed to providing accounting services and lasting relationships with our clients.

    We are very lucky to have him as part of our team!

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  • Nexia Day 2018
    Posted

    “Nexia Day is a great way for everyone to get involved and celebrate the strengths of our network, wherever they are” Kevin Arnold, CEO of Nexia International.

     

    Last week staff ventured off in Taylor Creek Business Park and worked together as a team to pick up garbage in the neighbourhood. We had close to 30 volunteers take part in the activities. We believe that our relationships between the firm, its staff, clients and community forms the bedrock of our business and involvement with Nexia. Following the neighbourhood clean up, staff celebrated with a Summer BBQ.

     

    For more information on Nexia Day please visit: https://nexia.com/nexia-day/

    “Nexia Day is a great way for everyone to get involved and celebrate the strengths of our network, wherever they are” Kevin Arnold, CEO of Nexia International.

     

    Last week staff ventured off in Taylor Creek Business Park and worked together as a team to pick up garbage in the neighbourhood. We had close to 30 volunteers take part in the activities. We believe that our relationships between the firm, its staff, clients and community forms the bedrock of our business and involvement with Nexia. Following the neighbourhood clean up, staff celebrated with a Summer BBQ.

     

    For more information on Nexia Day please visit: https://nexia.com/nexia-day/

    Read More
  • Montebello Retreat Part 1
    Posted

    This past week our part of our Andrews team had the chance to get away from the office and visit Fairmont le Chateau Montebello for a two day team bonding retreat. On the night of arrival staff relaxed and enjoyed a lovely dinner at the chateau. On Friday morning staff enjoyed a breakfast buffet, and then made use of the hotel’s facilities (pool, spa). During the afternoon all staff participated in ATV’ing and then had a team bonding dinner which allowed everyone to socialize and collaborate to build new relationships.

    This past week our part of our Andrews team had the chance to get away from the office and visit Fairmont le Chateau Montebello for a two day team bonding retreat. On the night of arrival staff relaxed and enjoyed a lovely dinner at the chateau. On Friday morning staff enjoyed a breakfast buffet, and then made use of the hotel’s facilities (pool, spa). During the afternoon all staff participated in ATV’ing and then had a team bonding dinner which allowed everyone to socialize and collaborate to build new relationships.

    Read More
  • Women’s Business Network Golf Tournament
    Posted Uncategorized

    Andrews & Co. was a proud sponsor of the 24th annual Women’s Business Network golf tournament held on Wednesday June 20th  in support of Healthy Women, Healthy Community, an initiative of the Ottawa Hospital Foundation. Four Andrews staff members attended the event, engaged in a 9-hole round of golf as well as some fun activities and mingled with other professionals, entrepreneurs and businesses.

    A huge thanks to the Women’s Business Network for organizing such an engaging event benefiting a great cause!

     

    Andrews & Co. was a proud sponsor of the 24th annual Women’s Business Network golf tournament held on Wednesday June 20th  in support of Healthy Women, Healthy Community, an initiative of the Ottawa Hospital Foundation. Four Andrews staff members attended the event, engaged in a 9-hole round of golf as well as some fun activities and mingled with other professionals, entrepreneurs and businesses.

    A huge thanks to the Women’s Business Network for organizing such an engaging event benefiting a great cause!

     

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  • NOW HIRING
    Posted

    We are now hiring for Staff Accountants and Accounting Technicians! Please visit our careers page for more information. To apply, please send your resume to jobs@andrews.ca.

    We are now hiring for Staff Accountants and Accounting Technicians! Please visit our careers page for more information. To apply, please send your resume to jobs@andrews.ca.

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  • Bake Sale and Walk for ALS 2018
    Posted

    Andrews & Co. is pleased to have helped Tracey Stratton in her annual walk for ALS (bake sale, staff donations). Tracey was joined by Lisa Mallet, Phil Hunter and a passionate community to challenge this devastating disease.

     

    Tracey reached her goal of raising $4,075! Congratulations on a fantastic job!

      

     

    Andrews & Co. is pleased to have helped Tracey Stratton in her annual walk for ALS (bake sale, staff donations). Tracey was joined by Lisa Mallet, Phil Hunter and a passionate community to challenge this devastating disease.

     

    Tracey reached her goal of raising $4,075! Congratulations on a fantastic job!

      

     

    Read More
  • ALS
    Posted

    This March marked the fifth anniversary of the passing of our partner Andy Foreman.  Andy struggled with ALS and ultimately lost the fight as do so many others afflicted by this terrible disease.

    Tracey Stratton and Lisa Mallet, two members of staff, will be participating in the Ottawa Walk for ALS which takes place on June 9th.  Walking with Tracey and Lisa will be Andy’s wife and other members of his family.  They have set themselves a goal of raising $4,000 to try and beat last years $3,770.  If you feel called to make a donation the details can be found in this link:

    https://secure.alsevents.ca/registrant/FundraisingPage.aspx?registrationID=4092908&langPref=en-CA

     

    This March marked the fifth anniversary of the passing of our partner Andy Foreman.  Andy struggled with ALS and ultimately lost the fight as do so many others afflicted by this terrible disease.

    Tracey Stratton and Lisa Mallet, two members of staff, will be participating in the Ottawa Walk for ALS which takes place on June 9th.  Walking with Tracey and Lisa will be Andy’s wife and other members of his family.  They have set themselves a goal of raising $4,000 to try and beat last years $3,770.  If you feel called to make a donation the details can be found in this link:

    https://secure.alsevents.ca/registrant/FundraisingPage.aspx?registrationID=4092908&langPref=en-CA

     

    Read More