CCH.CA – Press Releases - English

2010 Federal Budget Highlights

CCH Canadian Ltd — Fri, 05 Mar 2010 08:46:48 GMT

2010 Federal Budget Highlights

Benefits Entitlement - Shared Custody

Currently, child benefits paid under the Goods and Services Tax/Harmonized Sales Tax Credit (GST/HST credit), the Canada Child Tax Benefit, and the Universal Child Care Benefit, may not be claimed by more than one eligible individual. To improve the allocation of child benefits between parents sharing custody of a child, the 2010 Budget announced that, for benefits payable beginning July 2011, two eligible individuals will be entitled to receive the GST/HST credit and the Canada Child Tax Benefit and Universal Child Care Benefit amounts, with respect to a child. The recipients must be eligible to receive amounts under the Canada Revenue Agency's existing shared eligibility policy, which applies where a child lives more or less equally with two individuals who live separately. Corresponding amendments will be made to the Universal Child Care Benefit Act.

Universal Child Care Benefit for Single Parents

The Universal Child Care Benefit (UCCB) provides families with $100 a month for each child under the age of six. In the case of a single-parent family, UCCB amounts are generally included in the single parent’s income. The Budget announced that, for 2010 and subsequent taxation years, a single parent will have the option to include the total UCCB amount received (with respect to all of his or her children) in his or her income, or in the income for the dependant for whom an Eligible Dependant Credit is claimed. This measure is intended to remedy situations in which a single-parent family pays more tax on the same UCCB than a two-parent family with the same income, where the UCCB is included in the income of the lower-income spouse or common-law partner. Single parents unable to claim this credit will have the option of including the total UCCB amount in the income of one of the children for whom the UCCB is paid.

Medical Expense Tax Credit - Purely Cosmetic Procedures

The Budget proposes to exclude from the list of expenses eligible for the Medical Expense Tax Credit, expenses incurred after March 4, 2010 for purely cosmetic purposes, including related services and other expenses (such as travel). This includes surgical and non-surgical procedures aimed solely at enhancing one’s appearance such as liposuction, hair replacement procedures, botulinum toxin injections, and teeth whitening. Cosmetic procedures (including those noted above) will continue to qualify for this credit if they are required for medical or reconstructive purposes. Such situations include surgery with respect to a deformity relating to a congenital abnormality, a personal injury stemming from an accident or trauma, or from a disfiguring disease.

The Budget also proposes to clarify that purely cosmetic procedures are subject to GST/HST.

Rollover of RRSP Proceeds to an RDSP

Currently, a deceased individual's Registered Retirement Savings Plan (RRSP) or Registered Retirement Income Fund (RRIF) proceeds may be rolled over to the RRSP or RRIF of a financially dependent infirm child or grandchild. The Budget proposes to extend this special tax treatment to allow a deceased individual's RRSP or RRIF proceeds to be rolled over to the Registered Disability Savings Plan (RDSP) of a financially dependent infirm child or grandchild. This change applies with respect to deaths that occur after March 3, 2010, to contributions made to an RDSP of an individual, provided that certain conditions set out in the Budget are met. Transitional rules also apply.

Provincial Payments into RESPs and RDSPs

The federal and provincial governments provide financial assistance to Canadian families who wish to save for their children's education through Registered Education Savings Plans ("RESPs") or who wish to save for the long-term financial security of their severely disabled children through Registered Disability Savings Plans ("RDSPs"). The federal government also provides certain grant and bonds, such as the Canada Education Savings Grant and the Canada Learning Bond in relation to RESPs, and the Canada Disability Savings Grant and Canada Disability Savings Bond with respect to RDSPs. Currently, only provincial payments made into RESPs and RDSPs through provincial programs that are administered by the federal government receive the same treatment as federal grants and bonds paid into RESPS and RDSPs; accordingly such provincial payments do not exhaust a beneficiary's RESP or RDSP contribution room and they do not attract or reduce federal grants and bonds. The Budget clarifies that all payments made into a RESP or into a RDSP through a program administered by a province or under a program funded, directly or indirectly, by a province but administered by a third party will be treated in the same manner as federal grants and bonds paid into RESPS and RDSPs. The changes relating to provincial programs administered by a province will apply for the 2007 and subsequent taxation years. Those relating to programs that are funded directly or indirectly by a province, but which are administered by a third party, will apply for the 2009 and subsequent taxation years.

Scholarship Exemption and Education Tax Credit

The Budget provides that, where the scholarship exemption applies to a student in a part-time program, the exemption will apply only to an award to the extent it covers tuition fees and costs incurred for program-related materials. The budget papers indicate that this limit will not apply to students entitled to the disability tax credit or students who cannot enroll full-time owing to a mental or physical impairment.

Currently, scholarships, bursaries and fellowships ("awards") are excluded from income if received by students in respect of programs at post-secondary institutions, or in respect of programs at other institutions that are certified by the Minister of Human Resources and Skills Development as being institutions that furnish a person with skills for, or improve a person's skills in, an occupation. The Budget proposes that a post-secondary program that consists principally of research will not be a "qualifying education program", and therefore not eligible the scholarship exemption or the education tax credit, unless the program leads to a diploma from college or CEGEP, or a bachelor, masters or doctoral degree (or an equivalent degree). According to the budget papers, this means that post-doctoral fellowships will not be subject to the exemption and therefore will be taxable.

These proposals apply for the 2010 and subsequent taxation years.

Charitable Expenditures

In order for a charity to retain its registered status, it must expend a specified amount of its funds on charitable activities or on gifts to qualified donees each year. The specified amount is the charity's disbursement quota, the rules of which were intended to discourage the accumulation of funds in excess of those needed by a charity to meet its charitable objectives. Generally, a charity's disbursement quota was equal to the sum of 80 percent of receipted donations for the previous year and 3.5 percent of all assets not used in charitable programs or administration in excess of $25,000. Charities are also subject to some restrictions on their ability to accumulate capital and some anti-avoidance rules in respect of delayed expenditures on charitable activities and gifts between non-arm's-length charities. The Budget proposes to repeal the charitable expenditure rule, modify the capital accumulation rule, and expand the grounds on which the Minister may impose penalties on, or revoke the registration of, a charity.

Employee Stock Options

Stock Option "Cash-Outs"

Generally, when stock options are issued by an employer to an arm's length employee, the taxation of the benefit derived by the employee from the options is subject to tax pursuant to various rules set out in the Income Tax Act (the "Stock Option Rules"). The Stock Option Rules are almost always a benefit to an employee participating in a stock option arrangement, since the effective rate of tax on the stock option benefit will be equivalent to capital gain rates. At the same time, the Act denies any deduction to the employer with respect to the stock option benefit provided to the employee. A CRA administrative position, however, has been often been relied upon to create a "win-win" scenario with respect to employee benefits derived by way of stock option arrangements in certain cases. The Budget proposes new rules to reverse this effect of this administrative position in circumstances where cash is received by the employee for the disposition of the employee's rights. This change applies with respect to a stock option issued after 4:00 p.m. on March 4, 2010.

Tax Deferral Election and Remittance Requirement

The February 27, 2000 Budget recognized that requiring immediate taxation of the benefit arising from certain options might create undesirable results in some cases. Upon exercise of the options, in many instances, employees would be forced to sell the underlying shares to pay the tax. Accordingly, a new set of rules was introduced to allow the deferral of the benefit, up to a set limit. Based on the statements made in the Budget, it appears that many taxpayers who took advantage of the deferral have suffered from a subsequent decline in value of the stock obtained by exercising the option. The problem that arises in this instance is that the loss in value of the stock is treated generally as a capital loss, which cannot be applied to offset the benefit. In many cases, it also appears that the value of the stock at the time of sale was not sufficient to satisfy the tax owing, and tax was not being paid in many situations. The Budget contains measures to deal with this problem, by eliminating the ability to defer the benefit for non-CCPC options, effective for employee stock options exercised after 4pm EST on March 4, 2010.

The Budget also clarifies the withholding obligations imposed on employers when stock options have been exercised and shares have been acquired.

Special Relief for Tax Deferral Elections

To address the problem of declining stock value after the exercise of options, the Budget provides a new way of looking at the net economic gain or loss of the employee. This new relief is only to be available with respect to securities sold before 2015 which were the subject of a deferral election. Where a taxpayer makes and files and election in prescribed form (the "Special Election"), special relief will ensure that the tax liability payable will not exceed the proceeds of disposition for the particular shares. The capital gain deemed to have been realized as a result of the Special Election will be disregarded for the purposes various provisions of the Act relevant when claiming certain personal tax credits, computing the tax on Old Age Security Benefits and computing the Working Income Tax Benefit.

U.S. Social Security Benefits

Currently, a Canadian resident receiving benefits under U.S. Social Security (including tier 1 railroad retirement benefits, but not including unemployment insurance) is entitled to deduct 15 percent of the amount of the benefit for purposes of calculating Canadian income tax. Prior to changes to the Canada-U.S. Treaty made effective in 1996, the deduction rate was 50 percent. The Budget essentially restores the 50 percent deduction rate on the total of all U.S. Social Security benefits received by a Canadian taxpayer, by allowing an additional 35 percent deduction for taxation years ending after 2009. A taxpayer will qualify for the additional 35 percent deduction if: (a) the taxpayer has been resident in Canada and has continuously, since before 1996, received U.S. Social Security benefits in each taxation year; or (b) the benefits are payable to the taxpayer in respect of a deceased spouse or common-law partner who qualifies under (a), and the taxpayer was resident in Canada and received such benefits in each taxation year from the time of death to the current taxation year.

Refunds of Non-Resident Withholding Tax

The Budget proposes a measure designed to assist non-residents to recoup taxes that have been withheld and remitted on their behalf to the Canada Revenue Agency (CRA). Where a person ("the Payor") makes a payment to a non-resident in respect of services rendered in Canada or purchases "taxable Canadian property" (TCP) from a non-resident, the Payor is generally required to withhold and remit a portion of the payment to the CRA. The remitted amount is on account of the non-resident's potential Canadian tax liability in respect of the services performed or the TCP sold. In many instances, the non-resident may be exempt from Canadian taxation pursuant to an income tax treaty with Canada. In such cases, the non-resident can generally seek a refund of the amount withheld and remitted by filing an income tax return for the relevant year, within the prescribed time periods. The Minister's ability to make assessments against the Payor for failure to withhold and remit do not include a limitation period for the CRA to reassess for such failures. However, as mentioned above, the non-resident is constrained in the amount of time that it can request a refund of overpayments, which may lead to difficulties where the CRA has assessed a Payor after the time period for requesting a refund has expired. The Budget proposes to remedy this situation by permitting a refund of an overpayment of tax under certain circumstances. To claim a refund, the non-resident must file a tax return no more than two years after the date of that assessment. This measure is effective for applications for refunds claimed in returns filed after March 4, 2010.

Capital Cost Allowance - Television Set-Up Boxes

The Budget proposed to increase the CCA rate for television set-top boxes that are used to decode digital television signals. Currently, satellite set-top boxes are Class 8 assets with a 20% CCA rate. Cable set-top boxes are Class 10 assets with a 30% CCA rate. Both satellite and cable set-top boxes that are acquired after March 4, 2010 and that have not previously been used or acquired for use will be eligible for a 40% CCA rate.

Capital Cost Allowance - Clean Energy Generation

The Budget also proposed some changes to assets in Classes 43.1 and 43.2. Class 43.2 provides CCA at a 50% declining balance rate for certain types of clean energy generation and conservation equipment. The Budget proposes to expand Class 43.2 for certain types of heat recovery equipment and distribution equipment of a district energy system acquired after March 4, 2010 that have not previously been used or acquired for use. Class 43.2 currently restricts heat recovery assets to those where the heat that is recovered is reused in the same type of process that generated it. This restriction is being removed. Classes 43.1 and 43.2, are also being expanded to include specified distribution equipment that is part of a district energy system used to provide district heating or cooling through the use of thermal energy provided primarily by a ground source heat pump system, an active solar system, heat recovery equipment or a combination as long as the generation equipment is included in Class 43.1 or 43.2.

Online Notices

The Budget Plan noted that various federal statutes, including the Income Tax Act, the Excise Tax Act and others, will be amended to allow for the electronic issuance of notices by the CRA, which are currently provided to taxpayers by ordinary mail. Once implemented, these measures will allow the CRA to issue certain notices electronically, through existing secure online accounts (ie, My Account or My Business Account), where a taxpayer has specifically authorized electronic receipt. This electronic delivery service will be made available for notices of assessment and reassessment of Part I income tax, as well as notices of determination and re-determination in respect of the GST/HST credit and the Canada Child Tax Benefit. In addition, legislative authority will also be provided for the CRA to issue electronic notices for GST/HST, excise tax and duty, and the Air Travelers Security Charge. Notices under any of these regimes which are specifically required to be personally served, or to be served by registered or certified mail, will not be eligible for electronic transmittal. The electronic distribution of specified notices will commence at a time to be announced by the Minister of National Revenue.

CCH & Advocis launch the first FPSC-Approved Capstone Course

CCH Canadian Ltd — Wed, 18 Nov 2009 00:00:00 GMT

TORONTO: November 18th, 2009 — CCH Canadian, in partnership with Advocis, is offering the first professionally published FPSC-approved Capstone Course education program, a new mandatory requirement for professionals seeking Certified Financial Planner (CFP®) certification. Candidates must successfully complete an FPSC-approved Capstone Course before writing the Financial Planning Examination Level 2 (FPE2) – the second of two financial planning exams.

Canadian colleges and universities will be able to incorporate the CCH/Advocis Capstone Course into their curriculum–in conjunction with other CCH/Advocis CFP certification courses or as a stand-alone product–as early as January 2010. CCH/Advocis is offering the course as a turnkey package that provides instructors with a wide range of teaching tools and support, including PowerPoint presentations, a dedicated website and time-saving assessment tools. CCH/Advocis can also tailor its program to meet the specific needs of the school.

The CCH/Advocis CFP Education Program is considered the benchmark of CFP certification programs. The new CCH/Advocis FPSC-approved Capstone Course is the fifth in the series, serving as the culmination of the core curriculum. The course is an exceptional compendium, concisely written and designed to help students further develop the competencies required to give them the best chance to succeed with the FPE2 exam. It also provides examination writing techniques and practice questions, as well as integrative case studies and practice in applying the concepts in the text.

The Capstone Course not only assesses candidates on their understanding of the core competencies required by a financial planner, but also their ability to integrate the technical knowledge and professional skills underlying those competencies. Students are required to complete a comprehensive financial plan to demonstrate their ability to turn financial planning theory into practice. The course structure includes the use of FPSC-developed case(s) in the completion of the required financial plan.

For more information please contact Caroline Cobham at caroline.cobham@wolterskluwer.com or 416-228-6170.

About CCH

Celebrating its 63rd year in Canada, CCH is the premier provider of authoritative software and information products–including compliance tools, research and practice materials–for accounting, financial planning, law and human resource professionals. CCH (www.cch.ca) is a Wolters Kluwers business (www.wolterskluwer.com).

Wolters Kluwer is a leading global information services and publishing company, providing products and services for professionals in the health, tax, accounting, corporate, financial services, legal and regulatory sectors. Wolters Kluwer had 2008 annual revenues of €3.4 billion, employs approximately 20,000 people worldwide, and maintains operations across Europe, North America, Asia Pacific and Latin America. Wolters Kluwer is headquartered in Amsterdam, the Netherlands. Its shares are quoted on Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices.

About Advocis

Advocis, The Financial Advisors Association of Canada, is the oldest and largest voluntary membership association of financial advisors and planners in Canada. With more than 10,000 advisors and planners in 43 chapters across Canada, Advocis members provide financial advice, product service and employee benefit planning to millions of Canadians in a number of areas, including estate and retirement planning, wealth management, risk management and tax planning. For more information about Advocis, visit www.advocis.ca.

CCH Profit Driver Delivers New Enhancements

CCH Canadian Ltd — Mon, 09 Nov 2009 00:00:00 GMT

The latest release features increased security management options, extended benchmarks and an enhanced projection system.

TORONTO, Ontario – November 9, 2009 – CCH, Canada's premier provider of tax and accounting research and compliance tools, is pleased to announce the launch of CCH Profit Driver, v.7.5, a part of the Accountants' Suite. CCH Profit Driver has driven impressive business successes with progressive accounting firms seeking to add new business consulting services to their client offerings. "Besides giving my clients what they need such as financial statements and tax returns, CCH Profit Driver allows accountant like me to provide my clients with what they really want – business advisory and consulting services." says Mark Holton, an internationally renown accountant, CCH Profit Driver user and trainer.

About CCH Profit Driver
CCH Profit Driver is a financial diagnostic tool that enables professionals to deliver a range of value-added services to their clients including working capital management, forecasting and budgeting, business health checkups, benchmarking, and goal seeking. Its powerful financial analysis capability allows professionals to quickly transform historical data into tactical plans. Users can instantly show their clients the outcomes of "what-if" scenarios and develop detailed plans for reaching goals.

CCH Profit Driver v.7.5 comes with a wide range of major enhancements that include:

Default Chart of Account Update – Provides additional lines and adjusted terminology for financial analysis in a range of industries.
Ascending/Descending loading – Select to load financial statements from earliest to oldest and from newest to oldest.
Multi-Year Projections & New Drivers - Set drivers separately for each period to be projected. Plus, define a dividend payout rate and model additional fixed assets.
Benchmark options - Extended benchmarks are now available from the following areas: Analysis, Strategy and Report screens.
UCA Cash Flow Report – New cash flow report now follows the UCA (Uniform Credit Analysis) format and provides a more in-depth cash flow analysis.

"This new version offers interesting enhancements to projection modules which will contribute in broadening the scope of CCH Profit Driver." says Anthony Vallée, CA - CCH Profit Driver Product Manager. "Moreover, as CCH Profit Driver is widely used in the financial sector, this new version also includes several tools allowing users to benefit even more from the analysis and follow-up methods used by large financial institutions."

For more information on CCH Profit Driver, visit cch.ca/profitdriver or call 1-800-268-4522.

About CCH Canadian Limited
CCH is Canada's premier provider of authoritative compliance tools, research and practice materials for accounting, legal and business professionals. Having celebrated its 60th anniversary in 2006, CCH Canadian produces software and information products that help customers take command of complex regulatory issues in tax, accounting, law, financial planning and human resources. CCH (www.cch.ca) is a Wolters Kluwer business (www.wolterskluwer.com).

Wolters Kluwer is a leading global information services and publishing company. The company provides products and services globally for professionals in the health, tax, accounting, corporate, financial services, legal and regulatory sectors. Wolters Kluwer has annual revenues (2007) of €3.4 billion, maintains operations in over 33 countries across Europe, North America and Asia Pacific and employs approximately 19,544 people worldwide. Wolters Kluwer is headquartered in Alphen aan den Rijn, the Netherlands. For more information, visit www.wolterskluwer.com.

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