Marion Fox has investments that generate interest income of $172,000 each year. She also has employment income in excess of $250,000 per year. This places her firmly in the top tax bracket, with a combined federal provincial rate of 53 percent.
She is considering transferring her interest bearing investments to a newly incorporated CCPC on January 1, 2020. In her province, the combined federal/provincial rate on the investment income of CCPCs is 50 percent. All of the corporation's income would be paid out as non-eligible dividends. The provincial dividend tax credit rate on non-eligible dividends is 35 percent of the gross up.
Advise Marion as to whether there would be any tax benefits associated with this transfer.

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The Answer of Marion Fox has investments that generate interest income of $172,000 each year. She also has employment income in excess of $250,000 per year. This places her firmly in the top tax bracket, with a combined federal provincial rate of 53 percent.
She is considering transferring her interest bearing investments to a newly incorporated CCPC on January 1, 2020. In her province, the combined federal/provincial rate on the investment income of CCPCs is 50 percent. All of the corporation's income would be paid out as non-eligible dividends. The provincial dividend tax credit rate on non-eligible dividends is 35 percent of the gross up.
Advise Marion as to whether there would be any tax benefits associated with this transfer.

Marion Fox Has Investments That Generate Interest Income of $172,000