How capital gains tax changes could affect some family doctors
Ottawa’s proposed tax increases on some capital gains, announced in this week’s federal budget has some family doctors worried, as they warn the changes may affect their ability to save for retirement.
“We don’t get pensions, we don’t get retirement funds, we don’t get insurance or sick days. We have to save up for our own retirement and for our own families,” said Canadian physician Dr. David Poon, who started a Facebook group ‘Professional Corporation Advocates’, which aims to rally professionals, especially doctors, against the changes.
“This is essentially a retroactive tax on our savings.”
The changes to how capital gains are taxed have been proposed as the government eyes ways to make up for some of the big spending measures announced in Tuesday’s budget.
According to the federal budget, the inclusion rate — the portion of capital gains on which tax is paid — for individuals with more than $250,000 in realized capital gains in a year will increase to two-thirds from one-half.
People realizing up to $250,000 in capital gains will continue to pay tax on 50 per cent of their capital gains. For corporations and trusts, however, there is no threshold. The inclusion rate for them will increase to two-thirds for all realized capital gains.
“The vast majority of family doctors and just doctors in general in Canada are practicing through what’s called a professional corporation,” explained Don Carson, a chartered accountant.
“And they have been using a professional corporation for various reasons, one of which is really to help assist and saving for retirement.”
Carson said that any excess dollars not needed for daily expenses for doctors and their families are invested in things like marketable securities and rental
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