Gagliese's Tax Court Win Spins A Benefit For Many Composers
Like many tax matters, it is best to consult a specialist but a recent win by Canadian composer Rocco Gagliese in a dispute with Canada Revenue means other composers can claim a lower tax rate on income flowing into an active corporation.
By External Source
The eligibility for the small business deduction rate came up just last week in a decision handed down by the Tax Court involving Emmy-award-winning music composer Rocco Gagliese.
This past week marked the one-year anniversary of the launch of the government’s much-maligned plan to overhaul the tax rules governing Canadian controlled private corporations (CCPCs), which originally proposed to shut down three areas: income sprinkling of dividends among family members, the accumulation of passive income inside of CCPCs, and surplus stripping, whereby dividend income is effectively converted into lower-taxed capital gains.
The proposal regarding surplus stripping has been abandoned (at least for now), but legislation limiting income sprinkling has been passed and is effective for 2018. Similarly, a new rule addressing the accumulation of passive income in a CCPC by restricting the corporation’s access to the small business deduction’s low tax rate once its passive investment income exceeds $50,000 will begin applying in 2019.
Financial Post columnist Jamie Golombek digs into the backgrounder that led to a recent decision handed down by the Tax Court involving Emmy-award-winning music composer Rocco Gagliese.
Over the years, Gagliese has written music for a wide variety of television shows, including a number of children’s shows such as Peep and the Big Wide World, Curious George, Wonder Why? and Fetch!, for which he won the Emmy in 2008 for best original children’s television theme song. He has also written music for CBC programs such as The National, The Passionate Eye and The Lang and O’Leary Exchange. — Continue reading about Gagliese’s case in Golombek’s column.