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Can You Still Pay Your Kids Dividends

While They Are in University?


The December 13, 2017 “clarification” to the July 18, 2017 income splitting proposals may raise more questions than it answers. This tip is about a situation that appears clear where income splitting is no longer possible.

One of the most effective income splitting we used to have was the ability to pay dividends to children while they were in university or other post-secondary schools. This was normally accomplished with a family trust. The dividends were paid from the operating business to the family’s trust and then distributed to the kids. This is a help to the business owner who is no doubt paying for the kids education. The kid had little income so the dividends did not create much taxable income.

 This is over as of the beginning of
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