What is tax planning?

Tax planning involves arranging one’s financial affairs to reduce the tax liabilities. There are three basic goals of tax planning:

    • tax reduction
    • tax deferral
    • tax splitting

Effective tax planning occurs when the results of these arrangements are consistent with the intent of the law.

Aggressive tax planning refers to arrangements that “push the limits” of acceptable tax planning. This could make them subject to attack under the General Anti-Avoidance Rule.