Richardson GMP

As part of our commitment to keep you informed, we thought the following could be of interest to you. As you may know, on October 30, 2014, the Federal Government introduced numerous tax saving measures for families which include:

  • The introduction of a new Family Tax Cut Credit (a form of income splitting)
  • Increases to the Child Care Expense Deduction by $1,000 per year
  • Increases to the Universal Child Care Benefit by $60 per month and extended for children up to age 18

However, included with the unveiling of tax-saving measures was the elimination of the Child Tax Credit which will be replaced by the enhanced Universal Child Care Benefit (UCCB) for the 2015 and subsequent taxation years. The government also announced the continuation for the Family Caregiver Tax Credit. 

Family Tax Cut Credit

This measure will allow a higher income earning spouse to transfer income of up to $50,000 to the lower income earning spouse, resulting in a lower combined tax payable. This will be a notional allocation, and the amount would still be reported on the higher income earning spouse’s tax return.

In order to qualify for this new credit, you must have a child under the age of 18 at the end of the year. That child must also ordinarily reside with you or your spouse or common law partner throughout the year.

How is the credit calculated?

  1. Calculate the combined federal tax the couple would normally pay after claiming non-refundable tax credits.
  2. Calculate the combined federal tax payable if the higher earning spouse transferred income up to $50,000 to the lower earning spouse.
  3. Claim the difference between the two amounts as the Family Tax Cut Credit, up to a maximum of $2,000.


Richard and Mary have two minor children and earn salaries of $25,000 and $150,000 respectively. Their total combined federal tax payable is $33,225.

If Mary allocates $50,000 of her income to Richard, their combined federal tax payable would reduce to $29,490.

Either Richard or Mary could claim a Family Tax Cut Credit equal to the lesser of:

  1. The difference in the tax savings of $3,735
  2. $2,000

Note the Family Tax Cut Credit is only for Federal income tax purposes.

Should you have any questions on these measures, or any other areas of tax and estate planning please contact us




Dwight Jefferson, CIMA®
Senior Vice President
Portfolio Manager
Tel.: 604.640.0555 • Email

Tyler Steele, CFA
Senior Vice President
Portfolio Manager
Tel.: 604.640.0554 • Email

Paul Rietkerk, CIM, FMA
Associate Portfolio Manager
Tel.: 604.640.0562 • Email

Neil Kumar
Associate Investment Advisor
Tel.: 604.640.0406 • Email

Wendy Lloyd
Tel.: 604.640.0556 • Email

Jessica Dewey
Tel.: 604.640.0405 • Email

Brenda Geib, BA
Tel.: 604.640.0559 • Email

Richardson GMP Limited
500 – 550 Burrard Street
Vancouver, BC V6C 2B5

Toll Free: 1.866.640.0400
Fax: 604.640.0300

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The opinions expressed in this report are the opinions of the author and readers should not assume they reflect the opinions or recommendations of Richardson GMP Limited or its affiliates. Assumptions, opinions and estimates constitute the author's judgment as of the date of this material and are subject to change without notice. We do not warrant the completeness or accuracy of this material, and it should not be relied upon as such. Before acting on any recommendation, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. Past performance is not indicative of future results. The comments contained herein are general in nature and are not intended to be, nor should be construed to be, legal or tax advice to any particular individual. Accordingly, individuals should consult their own legal or tax advisors for advice with respect to the tax consequences to them, having regard to their own particular circumstances. Insurance services are offered through Richardson GMP Insurance Services Limited in BC, AB, SK, MB, NWT, ON, QC, NS and PEI. Additional administrative support and policy management are provided by PPI Partners. Richardson GMP Limited is a member of Canadian Investor Protection Fund. Richardson is a trade-mark of James Richardson & Sons Limited. GMP is a registered trade-mark of GMP Securities L.P. Both used under license by Richardson GMP Limited.