Frontenac Castle and Dufferin Terrace - Quebec City

Quebec’s budget has proposed to align the province’s legislation with the draft federal income splitting rules as announced by the Department of Finance Canada on December 13, 2017. After the harmonization, “the splitting of income with adult family members will no longer provide any tax benefit to the owner of the corporation,” except under the exceptions announced federally, says the Quebec budget.

Harmonization is also proposed for the proposed amendments to ensure that the split income tax does not limit eligibility for the lifetime capital gains exemption. (Read about the federal rules here.)

Other proposals by the Department of Finance Canada that do not require legislative or regulatory changes have also been harmonized by Quebec. This includes the proposal to increase reporting requirements for partnerships and trusts (read more about that here).

These changes to the Quebec tax system will only be adopted after the ratification of any federal law or the adoption of any federal regulation concerned. Where applicable, the amendments will apply on the same dates as the federal proposals with which they are harmonized.

For full coverage of the Quebec budget from Finance et Investissement, go here (in French).