Yes, of course. I would be happy to do so.
The current measure builds upon the existing tax on split income that applies to individuals under the age of 18, and it applies a top rate of taxation for income that is considered to have been split or diverted from a higher income earner to a particular individual. How it would apply is if certain split income, which can be dividends from private corporations generally, certain income from a trust, or passive income such as interest, gets paid to a certain individual and the amount is not what's called an “excluded amount”. For excluded amounts, there are a number of different categories. The catch-all category for those who are over the age of 25, which is the broadest class of affected individuals, would be amounts that are reasonable, having regard to the relative contributions of labour and capital of the individual who receives the income, as compared to all their relatives who have also contributed to the business. That formed the core of the rules announced in July 2017.
Then, in December 2017, a number of changes were made, simplifying and clarifying the draft legislation and providing a number of clear examples where, without having to test the reasonableness of a payment, it could be excluded from this tax on split income. This would include, for example, where you've put a significant labour contribution into the business, which would be considered to have been met if you've put in more than 20 hours a week during the portion of the year that the business is being carried on; or for non-services businesses, if you have a sufficient equity interest in the corporation carrying on the business, there would be an inclusion there. It would apply where an individual has a relative who is involved in a business, that individual receives income from that business, and that income, primarily for those aged 25 and over, is either unreasonable or none of the other exclusions are available.