Increased taxes on wealthy Canadians likely recoverable: Tax expert
BNN Bloomberg
Following a proposed move by Canada’s federal government to increase the minimum tax rate on wealthy individuals, one tax expert said the minimum tax is often recoverable.
The increase to the alternative minimum tax rate on wealthy Canadians was announced Tuesday as part of the 2023 federal budget. The increase is expected to take effect in 2024 and will bring the alternative minimum tax rate from 15 per cent to 20.5 per cent.
“The good news, however, is that in almost every case, the minimum tax is really just a prepayment. It is recoverable, there is a seven-year carry forward to the extent that your ordinary tax exceeds minimum tax in a future year,” Jamie Golombek, the managing director of tax and estate planning at CIBC Private Wealth Management, said in a television interview Tuesday.
In its current form, minimum tax places limits on potential tax advantages an individual can receive from incentives, according to Canada Revenue Agency. A minimum tax applies if it is higher than the federal tax an individual would pay when calculated in the typical way.
