Income splitting among family members : the attribution rules

This thesis is a study of certain means available to taxpayers who wish to split their income with other members of their family and thereby reduce their taxes. There are essentially four sections to the study: (a) a description of the Canadian system of taxation of the family and the reasons why the Income Tax Act treats each individual as a separate unit for income tax purposes as opposed to recognizing the family unit itself as the basis for taxation; (b) an analysis of the tax consequences of loans and transfers of property between spouses; (c) an analysis of the tax consequences of loans and transfers of property to children under the age of 18 years; and (d) an analysis of the concept of indirect payments. The principal conclusion of the study is that the means available to split income among family members are limited, especially in view of the recent amendments to the Income Tax Act to gradually eliminate the "family loan" method of splitting income