The Vancouver Sun
Smart Money Section
Friday, March 10, 2006
Canada Revenue Agency has announced the interest rate used to calculate taxable benefits for employees and shareholders from interest-free and low-interest loans will rise to four per cent for the calendar quarter commencing April 1.
Adrian Mastracci, investment counsel at Vancouver’s ‘fee-only’ KCM Wealth Management, says, "We may not see the three
per cent rate again for a long time.”
The same four-per-cent rate will apply to prescribed rate loans between spouses, including common law partners, for the upcoming quarter.
Hence, time is of the essence for anyone contemplating taking advantage of these loans, says Adrian Mastracci, fee-only investment counsel with Vancouver's KCM Wealth Management. The current rate is three per cent and is applicable on loans made until March 31.
The rules must be followed closely if investors intend to take advantage of the three-per-cent rate. All the strategies, arrangements and documentation must be in place no later than March 31.
"We may not see the three per cent rate again for a long time," Mastracci said.
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