Federal Government’s Tax Proposal
A lot has been written about the federal government’s proposed changes to private company taxation. And, undoubtedly, a lot more will be written as the new rules come to pass.
The proposals have been tweaked since their introduction back in the summer, with the focus now being on income splitting and passive investments. You can read more about the status of these tax proposals in this Grant Thornton article.
It may be too early to tell what tax strategies may (or may no longer) be available to private corporations when the new rules have been implemented, but life insurance should continue to provide several advantages that can help mitigate the impacts of these and future tax changes.
Life insurance provides the following:
- tax-deferred investment growth
- tax-free access to policy cash value upon a disability or illness
- tax-free payout of life insurance proceeds upon death
- tax-free distribution of insurance proceeds to beneficiaries through a capital dividend account
There are also more sophisticated strategies using life insurance that can assist in your personal cash flow—whether it be for investment purposes or lifestyle expenses—, all the while minimizing your exposure to tax.
There is a lot to like about life insurance. When set up to meet your goals—whether for your family, business, or charitable endeavours—the results can be powerful.
If you have any questions about your insurance or continuity plan, please contact us. And if your questions need some expert tax advice, we’ll happily refer you to a trusted colleague within our network.
Subscribe HERE to receive more updates from Cove as posts are published.