Be advised that personal tax instalments are due on December 15, 2018. Any individual who received a request to pay personal instalments in August or September, needs to attend to this matter before the due date.
Claiming Cannabis on your personal tax return
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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
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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
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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
