Jamie Golombek: July brings a greater opportunity for income splitting

Prescribed rates are set by the CRA quarterly and are tied directly to the yield on Government of Canada three-month treasury bills. The calculation is based on a formula in the Income Tax Regulations, which takes the simple average of three-month treasury bills for the first month of the preceding quarter rounded up to the next highest whole percentage point. As a result, the prescribed rate can never be zero, and one per cent is the lowest possible prescribed rate, which it was for a couple of years during COVID, specifically between July 1, 2020, and June 30, 2022.