Canadian Lawyer

February 2020

The most widely read magazine for Canadian lawyers

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Page 66 of 75 65 LEGAL REPORT TAX Killing the golden goose The federal Liberals' calls for more tax on the wealthy may seem non-controversial, but tax lawyers warn it may have unintended consequences THE SUNSHINE STATE is a short plane ride away, and, says Vitaly Timokhov, say what you will about American politics and Donald Trump but they have some common sense — they've made it extremely easy for Canadians to get immigration status. "People go to Florida sitting on millions in their investment accounts," Timokhov, a part- ner at Tax Chambers LLP in Toronto, says. "It's unbelievably easy to structure — it takes half a year. A lot of people do it." If you grew up in Canada, you're unlikely to pick up and move to save on tax, and young people tend to live where the economic opportunities are, he says. But if a person is ultra-high-net worth or a retiree and has most of their wealth in investible assets, it's easy to move somewhere like Florida with no loss of quality of life and easy access to the safety net in Canada that they've already paid into — for example, health care if they need it. "You buy a ticket to Florida and cut your taxes by 25 per cent right away," says Timokhov. "What would you do? If you're an upper-middle-class or high-net-worth Canadian, you don't think twice about it." A move to the south might be more tempt- ing as Prime Minister Justin Trudeau's federal Liberals continue to push "tax the wealthy" proposals. With the NDP advocat- ing for similar policies, legislative changes could make it to the finish line. The Liberals' so-called luxury tax, ten- tative mention of increasing capital gains exemption amounts and an NDP proposal to increase the top personal tax bracket by another two per cent fit in with the recent cli- mate of the attack on the "rich." "It's an easy sell," says Kim Moody, CEO and director of Canadian tax advisory at Moodys Gartner Tax Law LLP in Calgary, of the luxury tax, which would add an extra 10 per cent on any vehicles, boats or aircraft that cost $100,000 or more. He says the average person would look at that and think that, yes, they should pay the government more if they want a plane or a big

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