This paper reviews income splitting for small business owners. It discusses the expansion of tax on split income [TOSI] rules and their impact on capital gains. It also outlines TOSI exclusions, including excluded shares and businesses, reasonable returns, and safe harbor capital returns.

This paper is part of a collection presented at LESA’s Advising Small & Family Businesses program in Edmonton on February 6, 2019 and in Calgary on February 13, 2019.