Show clients you’re proactive by sending them this customizable letter about the Federal Budget.
Dear [Client/Prospect name],
As you know, Finance Minister Jim Flaherty delivered his federal budget on March 22 in Ottawa.
This budget has several items that could affect your financial plan or present additional opportunities. In case you haven’t had a chance to review the media coverage, I thought you would appreciate a quick overview of the federal budget.
RRSPs and estate planning: Several changes to RRSP rules aim to clamp down on use of RRSPs in certain tax planning schemes, including RRSP “strips.” The new rules are similar to anti-avoidance rules applied to TFSAs.
Individual Pension Plans: The latest budget proposes annual minimum amounts be withdrawn from IPPs once a plan member reaches age 72. This mirrors the current minimum withdrawals from RRIFs.
Guaranteed Income Supplement: The budget tops up the GIS, providing an additional $600 per year for single seniors, and up to $840 per year for senior couples.
RESPs: Transfers can now be made between individual RESPs for siblings without triggering tax penalties or repayments of Canada Education Savings Grants. The change only applies to asset transfers made after 2010.
Other Student Assistance: Eligibility for federal student loans and grants has been expanded for both full- and part-time post-secondary students. The in-study income exemption will be doubled to $100 per week and part-time students with high family incomes will now be eligible for a Canada Student Loan. There are also extensions of Education and Textbook tax credits for students working abroad.
Children’s Art Tax Credit: Expanding on a popular program for parents who enroll kids in fitness activities, Ottawa proposed a credit of up to $500 of eligible expenses for children’s programs associated with artistic, cultural recreational and developmental activities.
Family Caregiver Tax Credit: The budget introduces a 15% non-refundable credit on an amount of $2,000 to provide tax relief to caregivers of all types of infirm dependent relatives, including spouses, common-law partners and minor children.
RDSPs: Registered Disability Savings Plan beneficiaries with shortened life expectancies will have more flexibility to withdraw assets without requiring repayment of other programs, such as Canada Disability Savings Grants.
Home Renovation: Renewed funding for the Clean Air Agenda provides $400 million in 2011–12 for the ecoENERGY Retrofit to help homeowners pay for energy efficient upgrades.
Business Owners: Small businesses will receive a one-year break in EI payouts under a new Hiring Credit for Small Business. The government also gave a two-year extension of the popular 50% straight-line accelerated Capital Cost Allowance for manufacturing or processing machinery and equipment.
I hope you find these highlights useful. If you’d like to discuss these and other federal budget initiatives and how they affect your financial plan, please don’t hesitate to contact me.