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On October 26, 2009, the Alberta Government announced the Professional Corporations Amendment Act 2009 which focuses on removing the restrictions of share ownership within professional corporations. Accountants, dentists, medical doctors, lawyers, chiropractors and optometrists in Alberta who have an incorporated practice will be affected by this new legislation.
What is the Professional Corporations Amendment Act 2009?
This legislation now allows professionals in Alberta to transfer non-controlling shares to other family members.
How does this affect professionals in Alberta?
The new legislation focuses on removing restrictions of share ownership within professional corporations, which in turn will reduce tax exposure and provide more capital for professionals to reinvest in their practices. The new legislation will also allow professionals to take advantage of potential tax deferrals, income splitting and capital gains exemptions along with other advanced tax planning strategies. This also enables Alberta to effectively compete with other provinces in attracting and retaining key professionals.
What does this mean to the province of Alberta?
Alberta had one of the most restrictive rules regarding share ownership of professional corporations in Canada. These restrictions made it less attractive for professionals to practice in Alberta compared to other provinces. Through this new legislation, Alberta will be able to effectively compete in attracting and retaining highly trained and sought after professionals in an effort to meet the province’s growing demand for services.
How do professionals take advantage of this new legislation?
To receive these new tax advantages, you need to meet with your accountant or tax advisor who can assist you through the transition process.
If you have questions or would like to know how you can take advantage of the new legislation, please feel free to contact me or your local MNP advisor.
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