Rate to rise for the fourth consecutive quarter
The increase represents the fourth consecutive quarter that the rate has climbed
Clients who miss interest payment deadline risk losing an income-splitting opportunity
Beginning next month, the minimum rate that can be charged on such a loan will double
Now is the time to lock in 1% prescribed rate on family loans, achieve income splitting opportunity
Despite inflation, the prescribed rate on loans to family members remains set at 1%
The prescribed rate dropped to 1% from 2% in July, sparking "enormous interest" in refinancing
Interest rate returning to 1% in January
Henry Korenblum, tax specialist at Crowe Soberman LLP in Toronto, discuss the value of locking in spousal/family loans before the interest rate on these loans doubles on Oct. 1st, 2013. Korenblum spoke at the TMX Broadcast Centre in Toronto.
The CRA indicates it will likely raise the rate on prescribed loans to 2%