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.

  • INVESTMENT MANAGEMENT FEES FOR RRSPs, RRIFs, AND TFSAs: Are Changes Coming?
    Posted

    In a November 29, 2016 Technical Interpretation, CRA opined that where investment management fees incurred by an RRSP, RRIF or TFSA are paid from outside of the plan (such as by the annuitant or holder) the plan’s controlling individual would likely be subject to a tax equal to 100% of the fees paid.

    CRA opined that investment management fees represent a liability of the registered plan trust and should, therefore, be paid using funds from the plan. If paid from outside of the plan, the resulting indirect increase in value of the plan assets would likely constitute an advantage. That is, more assets would be retained in the tax-sheltered vehicle.

    CRA further noted that it is not commercially reasonable for an arm’s length party to gratuitously pay the expenses of another party. As such, there is a strong inference that a motivating factor of the above is to maximize the savings in the plan so as to benefit from the tax exemption afforded to the plan.

    Recognizing that it is common practice for the holder of these accounts to pay the management fees, CRA indicated they will defer the application of this position until January 1, 2018.

     

    Action Item: Be aware of changes in how investment management fees are charged in the near future to avoid this tax.

     

    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.

    In a November 29, 2016 Technical Interpretation, CRA opined that where investment management fees incurred by an RRSP, RRIF or TFSA are paid from outside of the plan (such as by the annuitant or holder) the plan’s controlling individual would likely be subject to a tax equal to 100% of the fees paid.

    CRA opined that investment management fees represent a liability of the registered plan trust and should, therefore, be paid using funds from the plan. If paid from outside of the plan, the resulting indirect increase in value of the plan assets would likely constitute an advantage. That is, more assets would be retained in the tax-sheltered vehicle.

    CRA further noted that it is not commercially reasonable for an arm’s length party to gratuitously pay the expenses of another party. As such, there is a strong inference that a motivating factor of the above is to maximize the savings in the plan so as to benefit from the tax exemption afforded to the plan.

    Recognizing that it is common practice for the holder of these accounts to pay the management fees, CRA indicated they will defer the application of this position until January 1, 2018.

     

    Action Item: Be aware of changes in how investment management fees are charged in the near future to avoid this tax.

     

    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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  • A trip to remember
    Posted

    This June, Renee Paquette, one of Andrews & Co.’s employees, has taken the opportunity to backpack in Peru with the organization, Operation Groundswell (OG).

    Operation Groundswell (OG) is a non-profit travel organization geared towards youth.

    Renee will be working personally alongside local indigenous organizations within the Peruvian Amazon to defend indigenous rights, and help strengthen their communities.

    Two of the organizations she will be working with are:

    Radio Ucamara:

    • A community radio project representing the Kukama people in Nauta, Peru. Their goal is to preserve the traditional culture by running a language school that teaches children the traditional Kukama language in effort to preserve its use within the community.
    • The goal is to help increase the impact of Radio Ucamara through increased community outreach and promotion.

    Curuinsi:

    • Organization comprised of indigenous youth who fight in defence of indigenous rights, they strive to keep their cultural practices alive and aim to strengthen their communities by supporting young community members who wish to obtain professional university degrees.
    • The goal is to help improve the existing meeting and cultural space in order to give them a usable space to live and work

    Renee is excited at the fact that she will be part of an experience that shares her values and mentions: “I feel extremely privileged to be able to visit this wonderful country while also being able to be a part of the resolution to their local challenges. This will truly be an adventure of a life time and I look forward to sharing it with all of you.”

     

    Check back in July for updates on Renee’s volunteering efforts in Peru.

    This June, Renee Paquette, one of Andrews & Co.’s employees, has taken the opportunity to backpack in Peru with the organization, Operation Groundswell (OG).

    Operation Groundswell (OG) is a non-profit travel organization geared towards youth.

    Renee will be working personally alongside local indigenous organizations within the Peruvian Amazon to defend indigenous rights, and help strengthen their communities.

    Two of the organizations she will be working with are:

    Radio Ucamara:

    • A community radio project representing the Kukama people in Nauta, Peru. Their goal is to preserve the traditional culture by running a language school that teaches children the traditional Kukama language in effort to preserve its use within the community.
    • The goal is to help increase the impact of Radio Ucamara through increased community outreach and promotion.

    Curuinsi:

    • Organization comprised of indigenous youth who fight in defence of indigenous rights, they strive to keep their cultural practices alive and aim to strengthen their communities by supporting young community members who wish to obtain professional university degrees.
    • The goal is to help improve the existing meeting and cultural space in order to give them a usable space to live and work

    Renee is excited at the fact that she will be part of an experience that shares her values and mentions: “I feel extremely privileged to be able to visit this wonderful country while also being able to be a part of the resolution to their local challenges. This will truly be an adventure of a life time and I look forward to sharing it with all of you.”

     

    Check back in July for updates on Renee’s volunteering efforts in Peru.

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  • 2017 ALS Walk
    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, one of the firm’s managers, will be participating in the Ottawa Walk for ALS which takes place on June 10th.  Walking with Tracey will be Andy’s wife and other members of his family.  She has set herself a goal of raising $3,000 to try and beat last years $2,845.01.  If you feel called to make a donation the details can be found in this link.

     

    https://secure.alsevents.ca/registrant/FundraisingPage.aspx?registrationID=3751777&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, one of the firm’s managers, will be participating in the Ottawa Walk for ALS which takes place on June 10th.  Walking with Tracey will be Andy’s wife and other members of his family.  She has set herself a goal of raising $3,000 to try and beat last years $2,845.01.  If you feel called to make a donation the details can be found in this link.

     

    https://secure.alsevents.ca/registrant/FundraisingPage.aspx?registrationID=3751777&langPref=en-CA

    Read More
  • Important filing dates 2017
    Posted

    Download our 2017 filing dates to ensure you stay on track for the rest of the year!

    Download our 2017 filing dates to ensure you stay on track for the rest of the year!

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  • charitable donations
    Posted

    Have you ever wanted to check a charitable organization’s identity and tax status before you donate?  In Canada all Registered Charities have key information made publicly available.  You can use the Charities Listing (Link below) to find out if a Charity is registered, revoked, annulled, suspended, or penalized.  You can even find a Charity’s contract information, general activities and financial information.

     

    http://www.cra-arc.gc.ca/chrts-gvng/lstngs/menu-eng.html

     

    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.

    Have you ever wanted to check a charitable organization’s identity and tax status before you donate?  In Canada all Registered Charities have key information made publicly available.  You can use the Charities Listing (Link below) to find out if a Charity is registered, revoked, annulled, suspended, or penalized.  You can even find a Charity’s contract information, general activities and financial information.

     

    http://www.cra-arc.gc.ca/chrts-gvng/lstngs/menu-eng.html

     

    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.

    Read More
  • CRA Tax Alert: Telephone Scams
    Posted

    The Canada Revenue Agency (CRA) is warning Canadian tax payers of an increase in telephone scams where the caller is impersonating a CRA representative. These callers are requesting personal and banking information that can result in identity and financial theft.

    A clear indication of a scammer will be if they request unusual or suspicious information from you. This information includes your credit card information – including prepaid credit cards, and your passport, health card, or driver’s license details. In addition, the CRA will never leave personal information in a voice mail message or request you to do the same.

    To verify if you are dealing with a legitimate CRA representative, request their name and identification number – some collections official may come off as forceful and aggressive, but all valid representatives will provide their identification number.

    You can then call the CRA back at their general enquires line and explain the situation. Once you provide them with the identification number and information received they will be able to authenticate the original call. Due to the high increase in fraudulent calls occurring, it is recommended that you never release the information being requested and following up with the general enquires line at the CRA at once. You can also talk with your accountant and they can provide additional guidance on your specific situation.

    A special note: If you are ever the victim of one of these calls, you should report it to the Canadian Anti-Fraud Centre at once.

     

    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

    The Canada Revenue Agency (CRA) is warning Canadian tax payers of an increase in telephone scams where the caller is impersonating a CRA representative. These callers are requesting personal and banking information that can result in identity and financial theft.

    A clear indication of a scammer will be if they request unusual or suspicious information from you. This information includes your credit card information – including prepaid credit cards, and your passport, health card, or driver’s license details. In addition, the CRA will never leave personal information in a voice mail message or request you to do the same.

    To verify if you are dealing with a legitimate CRA representative, request their name and identification number – some collections official may come off as forceful and aggressive, but all valid representatives will provide their identification number.

    You can then call the CRA back at their general enquires line and explain the situation. Once you provide them with the identification number and information received they will be able to authenticate the original call. Due to the high increase in fraudulent calls occurring, it is recommended that you never release the information being requested and following up with the general enquires line at the CRA at once. You can also talk with your accountant and they can provide additional guidance on your specific situation.

    A special note: If you are ever the victim of one of these calls, you should report it to the Canadian Anti-Fraud Centre at once.

     

    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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  • six things to avoid at tax time
    Posted

    CRA released a Tax Tip summarizing “Six things to avoid at tax time”.

    Read about it here to find out how you could save time and money: http://www.cra-arc.gc.ca/nwsrm/txtps/2017/tt170209-eng.html

     

    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.

    CRA released a Tax Tip summarizing “Six things to avoid at tax time”.

    Read about it here to find out how you could save time and money: http://www.cra-arc.gc.ca/nwsrm/txtps/2017/tt170209-eng.html

     

    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.

    Read More
  • T3 Filing deadline is fast approaching
    Posted

    The deadline for Trusts filing a T3 Statement of Trust Income Allocations and Designations is March 31, 2017.

     

    Action Item: Please consult with your accountant to determine if this applies to you.

     

    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.

    The deadline for Trusts filing a T3 Statement of Trust Income Allocations and Designations is March 31, 2017.

     

    Action Item: Please consult with your accountant to determine if this applies to you.

     

    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.

    Read More
  • Phoenix payroll issues
    Posted

    Have you been affected by Phoenix payroll issues?

    If so, the government has issued a question and answer bulletin on how to file your taxes. Please refer to the following link: http://www.cra-arc.gc.ca/gncy/prm/phnx-fq-eng.html

     

    Have you been affected by Phoenix payroll issues?

    If so, the government has issued a question and answer bulletin on how to file your taxes. Please refer to the following link: http://www.cra-arc.gc.ca/gncy/prm/phnx-fq-eng.html

     

    Read More
  • REPEATED FAILURE TO REPORT INCOME MAY RESULT IN A LARGE PENALTY
    Posted

    Currently, a taxpayer (including individuals, corporations and trusts) may be assessed a repeated failure to report income penalty of 10% of the unreported amount of income for a second or subsequent failure to report income on a tax return that occurs within a four-year period.

    For 2015 and subsequent tax years, the penalty would only apply where the amount of unreported income by the taxpayer is $500 or more. The budget also proposes changes to the penalty calculation. Under these changes, the amount of the penalty will be the lesser of 10% of the amount of unreported income; and

    an amount equal to 50% of the difference between the understatement of tax (or the overstatement of tax credits) related to the omission and the amount of any tax paid in respect of the unreported amount.

     

    Example:

    Greg failed to report interest income of $10,000 on both his 2015 and 2016 Personal Income Tax return (T1). Since this was his second failure to report income within the four year window, a penalty of $1,000 plus a provincial/territorial penalty of $1,000 are assessed.

     

     

    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.

    Currently, a taxpayer (including individuals, corporations and trusts) may be assessed a repeated failure to report income penalty of 10% of the unreported amount of income for a second or subsequent failure to report income on a tax return that occurs within a four-year period.

    For 2015 and subsequent tax years, the penalty would only apply where the amount of unreported income by the taxpayer is $500 or more. The budget also proposes changes to the penalty calculation. Under these changes, the amount of the penalty will be the lesser of 10% of the amount of unreported income; and

    an amount equal to 50% of the difference between the understatement of tax (or the overstatement of tax credits) related to the omission and the amount of any tax paid in respect of the unreported amount.

     

    Example:

    Greg failed to report interest income of $10,000 on both his 2015 and 2016 Personal Income Tax return (T1). Since this was his second failure to report income within the four year window, a penalty of $1,000 plus a provincial/territorial penalty of $1,000 are assessed.

     

     

    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.

    Read More