Claiming Cannabis on your personal tax return

A question raised was if the purchase of Cannabis from a retail or provincially regulated Cannabis retailer can be claimed on a personal tax return as a medical expense.

The short answer is no.

The claim for cannabis is made under Paragraph 118.2(2)(u) of the Income Tax Act. To qualify, the patient must be authorized under the Federal Acts and the purchase must be made from either Health Canada or other certain specified production licenses. The provincially regulated Cannabis retailers who opened on Oct 17, 2018 do not hold the licenses under that Paragraph so no purchases made from those locations will qualify.

It is entirely possible that the Act may be changed. But presently, this is what the law says.

If you find that the retail source is cheaper than the medical source, you may wish to consider if it is to your benefit to purchase from the retail source. If that is your choice, you must evaluate the lost benefits from any insurance claims which you will be entitled to as well as the impact on your tax return from no longer being able to make a medical claim for the same item. This evaluation is based on your personal circumstance and is beyond the scope of this article. You are welcome to engage my services to assist you with this, by using the Contact Me tab on your screen.

Instalments – December 2018

This is a reminder that personal instalments are due on December 15, 2018. The amount due is generally either ½ of the total amount due in April 2018, if you did not receive a request to pay instalments earlier this year, or ½ of the amount remaining from your tax bill in April 2018, less the amount that you were requested to pay on March 15, June 15, and Sept 15, 2018.

Note that my clients can elect to have reminder emails sent out two weeks prior to the instalment due date.

You may also arrange for pre-authorized debit withdrawals from your bank through the CRA’s My Account service.

Failing to prepaid the instalments will result in non-deductible interest charges.

New Trust Rules

Obligations of the executor/trustee handling an estate of a deceased individual

The Finance Department proposed in the 2018 budget new rules for Trusts and Estates which are to be filed in 2021 or later. This means that any executor or trustee who is responsible for handling an estate for someone who dies in 2020 (one year earlier) or has an estate which continues without a certificate of discharge beyond 2020, will be affected by these new rules.

Of particular impact is the imposition of a significant penalty of $25 per day, with a minimum penalty of $100 and a maximum penalty of $2,500 for every occurrence of a T3 return filed either late or without the new (proposed) beneficial ownership reporting documents.

If a failure to file the return was made knowingly, or due to gross negligence, an additional penalty will apply. The additional penalty will be equal to five per cent of the maximum fair market value of property held during the relevant year by the trust, with a minimum penalty of $2,500.

This means that, an executor/trustee who knowingly fails to timely file a trust return, could be personally liable for a minimum penalty of $2,600.

We can help you with handling the Canadian/Quebec tax matters resulting from the estate of a loved one – Please feel free to contact me.

Thank you so much for getting this sorted out for me so quickly and efficiently. So glad to have finally got all my taxes in order. I received the cheque on the mail last week just in time for us to spend it all on our trip to Ireland this month to visit my family!

Thanks again

Phil

EU General Data Protection Regulation – Compliance or not?

If you use computer software or websites, you probably have heard of the EU General Data Protection Regulation (GDPR.) It seems that everyone is gearing up to be compliant by May 25, 2018.

The GDRP is based on seven key principles. These are:

  1. Lawful, fair and transparent processing,
  2. Purpose limitation,
  3. Data Minimization,
  4. Accurate and up-to-date processing,
  5. Limitation of storage in the form that permits identification,
  6. Confidential and secure, and
  7. Accountability and liability.

For the most part, I have always worked towards compliance with this regulation, but I will not be compliant on May 25, 2018. I will point out that I am not required to be compliant as I do not work explicitly with EU citizens. My work is with Canadian resident individuals/businesses and individuals/businesses who have Canadian tax implications.

Compliance with all but the final principle is currently in place. In order to be compliant with the accountability and liability principle, I am required to be able to remove client data. Under Canadian laws and regulations, I am required to keep that same data for audit by the government. While I can move client information to an inactive state, I can’t remove it. This is the extent that I can be compliant.

If a EU citizen wishes to use my services, they must be aware that, during a conflict between the Canadian requirement to retain the information and the EU requirement to permit someone “to be forgotten,” I must remain compliant with the Canadian requirements.

For the above reason(s), I must regretfully decline full compliance with GDPR.