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New Tax Legislation for Alberta Professionals Becomes Law


Bill 53, also known as the Professional Corporations Statutes Amendment Act, 2009 passed through the Alberta legislature and was given Royal Assent on November 26, 2009. The Act removes many of the restrictions of share ownership placed on professional corporations. Accountants, dentists, medical physicians, lawyers, chiropractors and optometrists who have an incorporated practice in Alberta are impacted by this new legislation.

What does the legislation do? When does it become effective?

This legislation now allows professionals in Alberta to transfer non-controlling shares to other family members. It comes into effect immediately and will allow for substantial tax savings for Alberta professionals and their families.

What does this mean to professionals in Alberta?

Professionals who have an incorporated practice can have family members own an interest in their corporation which in turn will reduce their tax exposure and allow them to retain more capital after tax to reinvest and deliver enhanced services to their clients. Under this new legislation, they will also be able to take advantage of income splitting, tax deferrals, capital gains exemption benefits and other advanced tax planning strategies. This will also allow Alberta to effectively compete with other provinces in attracting and retaining key professionals.

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 immediately so they can assist you through the transition process. The transition can be somewhat lengthy, so it is recommended that this process commence as soon as possible.

To find out how you can take advantage of the new legislation or to find out if incorporation is right for you, please feel free to contact myself or your local MNP advisor.