Clients and friends,
Considering making a loan to a family member for investment purposes? Be sure to do so before July 1st, when the prescribed rate is set to rise from the current 1%. As long as the rate is set prior to the month of July, it will be locked in for the duration of the loan.
A prescribed loan rate can be beneficial for investment purposes. The strategy involves the lending of money to a spouse, a common-law partner, or an adult child who is in a lower tax bracket, which allows for the investment income to then be taxed at a lower rate.
Interested in learning more? Click Here for a related article with more detail on the topic. Just something to keep in mind should it be relevant to your planning.