Income splitting using dividends or salary payments to family members is one of the key tax strategies. However, the TOSI rules restrict the ability to split income to non-contributing family members. To maximize the benefits of income splitting while complying with these rules, a **family trust** could be a useful strategy. A family trust can hold shares in the corporation and allocate income or capital gains to beneficiaries in a tax-efficient manner.
Working with a professional accountant to set up and administer a family trust can allow you to strategically distribute income while minimizing tax liability.