Ask any Canadian business owner what happened to income splitting and you will get the same answer: TOSI killed it. Before 2018, a private corporation could pay dividends to a spouse who did nothing, to adult children away at school, to whoever in the family sat in the lowest tax bracket that year. Then the rules changed, and the general understanding is that this entire category of planning simply stopped working.

That understanding is half right, which is the most dangerous kind of half right. What actually happened is narrower and more interesting than “income splitting is dead.” The Tax on Split Income did shut down one specific manoeuvre: paying private-company income to family members whose only qualification was being related to the person who owned the business. That manoeuvre is genuinely closed. But it was never the whole of income splitting, and treating it as though it were has left a lot of Canadian households ignoring a real, current, and in some cases newly attractive set of tools, while continuing to half-remember advice that stopped being true eight years ago.