Income shifting is a tax strategy that involves transferring gross income from one taxpayer to another, typically to a taxpayer in a lower tax bracket, in order to reduce the overall tax liability of a group or family.
Income splitting involves distributing income among family members, trusts, or various business entities to potentially benefit from lower tax rates or threshold amounts. This practice is commonly associated with filing joint returns for married couples but can also include giving income property to children or utilizing multiple trusts or business structures.
A set of statutory provisions under which income arising from property that has been gifted is taxed as if it were income of the donor and not of the donee.
