Taxation

Personal Tax Planning

Regardless of your personal tax situation, our tax experts are at your service to propose strategies that will allow you to minimize your income tax bill and protect your assets.

Here are four situations where our expertise can prove to be highly useful:

1. To optimize the taxation between spouses
2. In preparation of the realization of a major gain
3. During the sale of a personal residence
4. To protect assets in the event of a lawsuit

If you are seeking to minimize the tax impacts of a death, consult our estate planning department.

If you are self-employed and have questions regarding deductible expenses or the pros and cons of incorporation, consult our individual income tax return department.

1. To optimize the taxation between spouses

If your couple generates substantial income and you are seeking to determine whether a given strategy would contribute to reducing your income tax bill, our tax experts can suggest means to optimize your personal tax planning.

Indeed, an analysis of your couple’s tax profile could be beneficial if you generate income from sources other than wages. For example, if you:

• possess rental buildings;
• have a lot of investments;
• possess significant assets.

We can validate if it is realistic to transfer income from one spouse to the other, for example through a spousal loan that is well-documented in your marriage or cohabitation contract or by making adjustments to your matrimonial regime to protect the lender’s assets.

An ideal scenario is generally one that splits the couple’s income as evenly as possible between both spouses.

2. In preparation of the realization of a major gain

If you foresee a substantial inflow of income, you most probably would like to know how much in income taxes will be payable on the gain.

Our tax experts can help you calculate the amount and validate if a strategy could be used to minimize your income tax bill, for example with respect to:

• the sale of agricultural land;
• the sale of shares in a private corporation;
• the exercise of stock options in a public corporation;
• the sale of a rental building.

To optimize your income spending, it is important to immediately set aside the amounts due in income taxes by April 30 of the year following the year during which the gain was made.

3. During the sale of a personal residence

If you generate income from the sale of a personal residence and already possess a second residence, our tax experts can provide you with advice that will enable you to make the optimal choice with respect to the designation of your primary and secondary residences, the goal being to minimize your income tax bill.

You must make this choice while your individual income tax returns are being prepared.

Certain conditions apply. For example, the residence must never have been rented out.

Our tax experts can also help you with respect to a change in use of your residence. For example, if:

• the rental property that you own becomes your primary residence;
• your primary residence becomes a rental property;
• you purchase a new residence but temporarily retain ownership of your former property for leasing purposes;
• you own a duplex, one of the two apartments is vacated and you decide to move into it.

Even though these situations do not involve the sale of a property, they are considered to involve a change in use and there will therefore be income tax implications.

4. To protect assets in the event of a lawsuit

Whether you work as a professional or an entrepreneur, if you are at risk of being sued personally because of an error or negligence on your part (lawsuits that are not covered by your professional insurance policy), it would be wise to consult our tax experts and consider the possibility of setting up an alter ego trust, i.e., an asset protection trust.

This strategy is particularly important if you incur financial and legal responsibilities in the performance of your duties, namely if you are:

• a director of a company;
• an RBQ guarantor (construction and resale of buildings);
• a professional (doctor, dentist, veterinarian, chiropractor, accountant, lawyer, notary, engineer, architect, etc.).

Our tax experts can provide you with advice on how to render your personal property and assets less vulnerable and adequately protect them.

To optimize your personal tax planning, please contact us for further information.