The Federal Budget of February 16, 1999, has introduced measures that will benefit the Canadian taxpayer.

Medical Expenses Tax Credit
The budget expanded on the kinds of equipment for which disabled people might receive a tax credit. These include:

• Therapy for people with prolonged and severe disabilities, and their care in a group home, and
• Tutoring of people with learning disabilities, or serious mental impairments.

RRSP or RRIF Proceeds on Death
When you die, all or part of your RRSP or RRIF assets can be transferred to a financially-dependent child or grandchild without taxation, even when your spouse survives you. This works best when you have other assets to take care of your spouse.

Income Splitting Taxation
Many taxpayers use every tactic in the book to split income among family members and Canada Revenue Agency knows it. Therefore, to discourage income splitting with minor children, a special tax, computed at the top marginal tax rate, will apply on the following types of income received by those under 18 years of age:

• taxable dividends and other share-holder benefits derived from owning (directly or indirectly) unlisted shares of Canadian and foreign companies.
• partnership or trust income derived by the partnership or trust from providing goods or services to a business operated by a relative of the individual.

This tax, to apply in the year 2000 and beyond, can be reduced by dividend and foreign tax credits. No other deductions or credits will be allowed.