There is a lot of discussion now in the media about the proposed tax hike put forward by the Provincial Government of Ontario. Premier Dalton McGuinty has proposed and dear reader do "note proposed" - it was not mentioned in the budget nor have I seen any proposed legislation - that a new tax bracket will be introduced whereby a two percent tax rate will be applied to annual income of $500,000 or more per year. Per the Ottawa Citizen this would mean the total tax hike would be 3.12 per cent on income above that level. This is to start July 1, 2012.
The discussions I have witnessed appear to presume that this will be additional incentive for high net worth individuals to cease residency and to move to a lower cost jurisdiction. From experience however I will note that moving offshore is often not as easy as it sounds as one must sever ties with Canada and ensure that visitation days in Canada do not amount to 183 days or more within the taxation year as that will re-establish Canadian residency status. Others have mentioned the setting up of a family trust in Alberta. Well if this is done then do note that my comments on in the mind and management post are very much relevant. If an Alberta trust is created care has to be taken the trust is managed and controlled in Alberta to ensure that the trust remains an Alberta trust and does not become an Ontario Trust.