Further, an examination will be undertaken to determine whether additional trusts should be exempt from the AMT.Ĭurrently, the AMT applies a flat 15 percent tax rate (rather than the progressive rates which otherwise apply) on income in excess of a $40,000 threshold. In Budget 2023, the Federal Government indicated that trusts that are currently exempt from the AMT will continue to be exempt (for example, certain spousal or common law partner trusts, alter ego trusts, mutual fund trusts, related segregated fund trusts, master trusts and employee life and health trusts). Essentially, individuals and certain trusts are required to calculate their annual income tax liability under both the regular method and the AMT, and they pay the higher of the two. The AMT is a parallel tax system aimed at ensuring that high income earners cannot unduly reduce their tax liability by taking advantage of certain deductions or other tax incentives. Municipal, Land Use Planning & Developmentīudget 2023 proposes the first major changes to the Alternative Minimum Tax (the “ AMT”) since its introduction in 1986 with the stated goal of “ensuring the wealthiest Canadians pay their fair share.”.International Arbitration & Cross-Border Litigation. White Collar Defence, Fraud & Investigations.Structured Finance, Derivatives & Securitization.Competition, Antitrust & Foreign Investment.
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