On April 21, 2015, the Minister of Finance, the Honourable Joe Oliver, presented the federal budget for 2015-2016 in the House of Commons. Some of the highlights contained in the budget are:
Registered Retirement Income Funds (RRIFs)
Under the current law, seniors who have reached the age of 71 were required to withdraw a minimum amount annually starting from the year after it is established. Currently a RRIF holder is required to withdraw a minimum of 7.38 per cent of their RRIF in the first year and maxing out to 20 percent at 94 years old. Under Budget 2015, the minimum withdrawal amount is reduced to 5.28 per cent in the first year and the cap is reduced to 18.79 per cent at age 94. For RRIF holders age 95 or older, the cap will remain at 20 per cent.
Registered Disability Savings Plans (RDSPs)
In 2012, the federal budget introduced a temporary measure to permit certain family members to become a plan holder of an RDSP in situations where an adult may lack the capacity to enter into a contract. This measure was to expire in 2016 but the federal budget 2015 has extended this measure to the end of 2018.
Tax Free Savings Accounts (TFSAs)
The government has increased the annual contribution limits to the TFSAs from $5,500 to $10,000 effective immediately.
Investments by Charities in Limited Partnerships
The federal budget 2015 proposes to permit charities to invest in limited partnerships under the condition that the charity‘s interest in the limited partnership does not exceed 20 per cent, and the charity deals at arm’s length with the general partner of the limited partnership. This measure will only apply to interests acquired after April 20, 2015.
Some of these federal budget changes might play a role in the development of your estate plan. To discuss how these changes might affect you, contact Marcia Green a Wills and Estate lawyer at Nelligan O’Brien Payne LLP.