Tax lawyer Michael Goldberg co-authored "Refinancing Prescribed-Rate Loans Used for Income Splitting" in Canadian Tax Focus.
The article discusses how a “prescribed rate loan” is an important tool that can enable high tax rate income earners to “split" income with lower tax rate income earners and reduce their overall taxes. As a result of the recent reduction of the prescribed interest rate from 2% to 1% this tool is receiving renewed attention. Unfortunately, refinancing higher rate prescribed rate loans may be complex and/or subject to certain risks.
The article is co-authored with Vincent Didkovsky of Newport Private Wealth. It appears in the August 2020 edition of Canadian Tax Focus, which is published by the Canadian Tax Foundation. Read the full article on the web at: https://www.ctf.ca/ctfweb/EN/Newsletters/Canadian_Tax_Focus/2020/3/200302.aspx,
or download the PDF at: https://www.ctf.ca/CTFWEB/Documents/NEWSLETTERS/FOCUS/CTFOCUS2003.pdf