Finance
November 20, 2006
Pension Income Splitting Available to the
Province�s Seniors
The Honourable Loyola Sullivan announced
today that pensioners in Newfoundland and Labrador will be able to split
eligible pension income for provincial income tax purposes.
�This is a significant tax benefit for senior couples, particularly
where there is a single earner, or where the income of one of the
spouses is more than the other,� said Minister Sullivan.
By transferring pension income from a higher income earner to the lower
income earner, less of the couple's income would be taxed in the higher
bracket, and more in the lower bracket, achieving a tax saving.
For seniors over 65, eligible pension income will include lifetime
annuity payments under a registered pension plan (RPP), a registered
retirement savings plan (RRSP), or a deferred profit sharing plan (DPSP),
and payments out of or under a registered retirement income fund (RRIF).
For persons under 65, eligible pension income includes lifetime annuity
payments under an RPP, and certain other payments received as a result
of the death of the individual�s spouse.
The new measure will come into effect beginning with the 2007 tax year.
Minister Sullivan also took the opportunity to comment on the income
trust issue.
�Federal Finance Minister Jim Flaherty has made a difficult decision in
moving to tax income trusts,� said Minister Sullivan. �We believe the
decision was the correct one. It restores integrity to the tax system,
ensures that the tax burden is not unduly shifted from corporations to
individuals, and that profits earned in this province are taxed here.�
The province has already seen a decline in its Corporate Income Tax as a
result of conversions to income trusts. The measures recently announced
by Minister Flaherty will put income trusts back on a level playing
field with corporations.
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Media contact:
Deborah Pennell
Director of Communications
Department of Finance
709-729-6830, 685-6612
deborahpennell@gov.nl.ca
2006 11 20
12:35 p.m. |
