Cra Spousal Loan Agreement

A. The idea behind a spout is to lend money to a low-income spouse. If the subsequent return on investment exceeds the credit rate imposed by the Canada Revenue Agency, the overall result is that the income is actually moved from one spouse to another and the family as a whole can pay less tax. – the interest rate set by the Canadian Revenue Agency (CRA) at the time of borrowing, or the interest rate at the time of maturity of the loan. For several years, the interest rate charged for joint loans was 1%, but it last increased in April 2018 to the current rate of 2%, applicable from the third quarter of 2019. A lawyer could certainly be used to prepare the loan contract, Ralph, but the most important considerations are that the loan is a loan at the current interest rate with payments arriving each year no later than January 30 – including the first loan year (probably a partial, proportional year). Perhaps the most important professional advice for a sp loan is the tax advice to ensure that the strategy actually results in less tax to be paid by you and your wife. ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ La stratégie est très pertinente du point de vue de la planification financière, les consultants et leurs clients s`inquiètent de l`impact de cette stratégie, si l`une des parties à the agreement dies or if customers suffer a breakdown of their relationship. That`s why we`ll process these scenarios below so that you`re prepared if you decide to make matrimonial loans for your clients during this quarter. If a spouse is in a higher tax class, it may be advantageous to lend money to the low-income spouse. The money can also be lent to a child. The funds can be used for the purchase of investments and the capital income tax is paid by the low-income spouse at a lower limit rate. For the loan, a debt must be credited with the interest rate and the principal amount.

The interest on the loan must be paid until January 30 of each year. To avoid the application of the imputation rules, the calculated interest rate must be higher or equal to less: in a recently published technical interpretation (2016-0642811E5, June 29, 2016), the rating agency proposes that it be able to apply GAAR to a mandatory spy loan agreement (described in the IT) if it can be shown that “the primary objective or one of the main objectives of the transactions to reduce the tax debt of the tax holder or spouse of the [taxpayer].” The rating agency states that the purpose of such an operation can only be determined if it carefully examines the facts of the situation in question.