Major tax reform is approaching. If you’re a physician who integrates charitable giving, capital gains, or flow-through shares into your financial strategy, the changes to Canada’s Alternative Minimum Tax (AMT) system may significantly affect your bottom line.
Coming into effect in 2026, these AMT updates are designed to target high-income earners who use legitimate, CRA-compliant strategies to reduce taxes. While the government presents this as a fairness initiative, the result for many doctors could be an unexpected increase in tax liability—even when following all rules.
At Imperial Lifestyle Management, we help physicians take a strategic, forward-looking approach. Here’s what you need to understand now to protect your wealth in the years ahead.
Key AMT Changes Physicians Must Know
- Capital gains will be fully included in AMT income (increased from 80 percent)
- Charitable donation credits will be reduced to 50 percent under AMT (down from 75 percent)
- The basic AMT exemption will increase to $173,000, but most physicians earn well beyond this level
- Flow-through shares and similar tax-sheltered investments will offer diminished benefits under AMT
If your financial plan involves donating securities, realizing investment gains, or leveraging advanced tax-efficient structures, these changes will likely increase your AMT exposure starting in 2026.
What Physicians Should Do Now
While the rules are changing, your ability to plan effectively is not. Taking the right steps today can ensure that your strategies remain tax-efficient under both systems.
- Consider the timing of charitable giving
If you are planning major donations—especially of appreciated securities—it may be advantageous to complete those contributions before 2026, while higher tax credits are still available. - Model income under both tax systems
Understanding how your income performs under the traditional tax calculation and the new AMT framework allows for proactive adjustments. This is especially important in years where you anticipate capital gains, large deductions, or charitable contributions. - Reassess the use of flow-through shares
These investment structures will be less impactful under the new AMT rules. It may be time to re-evaluate how they fit into your broader investment and retirement strategy. - Consult with financial advisors who specialize in physician planning
Tax strategies do not exist in isolation. Your financial plan should integrate tax, investment, retirement, and estate considerations. At Imperial Lifestyle Management, we understand the financial realities of medical professionals and offer integrated strategies designed for long-term success.
Final Thoughts
The upcoming AMT revisions don’t eliminate effective financial planning tools, but they do alter how those tools function. Doctors who plan ahead will have greater flexibility, fewer surprises, and more retained income.
Imperial Lifestyle Management offers customized financial planning for incorporated physicians across Canada. From investment structures to estate design, we position your entire financial picture for strength and stability—under current and future tax laws.
Book your consultation today and ensure your strategy is ready for 2026 and beyond.
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