Income Splitting Strategies 2025: Navigating TOSI Rules for Family Businesses

Page summary

Master TOSI rules and discover legal income splitting strategies for 2025. Expert guidance on family business tax planning and attribution rules.

• Article details: Tax Planning; published December 19, 2025; 9 min read.
• Income splitting—the practice of distributing income among family members to take advantage of lower tax brackets—has long been a cornerstone of Canadian tax planning for family businesses. However, the Tax on Split Income (TOSI) rules introduced in 2018 dramatically changed the landscape, replacing straightforward income sprinkling with a complex web of tests, exemptions, and documentation requirements.
• For Canadian business owners in 2025, understanding TOSI is no longer optional—it's essential. The difference between compliant income splitting and CRA reassessment can mean tens of thousands in additional taxes, penalties, and interest.
• This comprehensive guide explains what TOSI is, who it affects, the exemptions that still allow income splitting, and the legal strategies available to family businesses in 2025.
• Don't risk costly CRA reassessments due to TOSI non-compliance. The difference between effective planning and expensive mistakes can exceed $100,000+ over time.
• Contact ARMalik Professional Corporation for a confidential consultation on your family business income splitting strategies.

Related pages

• Blog: Browse more Canadian tax and accounting articles.
• Tax Planning & Advisory: Get advice before tax decisions become filing problems.
• Contact ARMalik: Ask a Markham CPA about how this topic applies to your situation.

Contact