Tax-efficient Investing

Tax-efficient Investing

Formal trusts, real property and the principal residence exemption

Many Canadians consider a living trust when creating their estate plans. More commonly known as inter vivos trusts, the trusts can be effective in reducing estate administration fees, avoiding complex estate settlements and ensuring confidentiality on death of its settlor. In some cases, these benefits can extend to a principal residence transferred to the trust. This article discusses the availability of the principal residence exemption on sale of a home by a trust, and where the exemption is not available, the taxation of accrued gains both at the time of sale and at death.

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Philanthropy

How to make donations more tax efficient

When it comes to philanthropy, altruism drives a Canadian’s desire to donate; however, Canada’s income tax regime may impact how the donation is made.

If a client wants to make a gift or donation to a Canadian charity, as advisors we can provide value by suggesting how to maximize the value of a donation or how to make a donation more tax efficient.

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Retirement

Understanding RRSP Attribution Rules

It is quite common for families to have income earners of different levels. Where the differences in income are significant, the ability to split income between family members can be an effective way to reduce taxes payable for the family.

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Tax-efficient Investing

What is a Capital Gain and How is it Taxed?

Background

Prior to 1972, capital gains on the disposition of property were not subject to tax pursuant to Canada’s Income Tax Act (ITA). Over the last 44 years, Canada’s Department of Finance, pursuant to its objective of taxpayer fairness, has introduced various tax measures impacting the reporting and taxation of capital gains, such as:

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Tax-efficient Investing

Update on Corporate Class

The 2016 Federal Budget announced changes impacting investors who hold Canadian Corporate Class funds.  As of January 1st, 2017, any switches, including systematic rebalancing, of Corporate Class funds will be treated as a disposition for tax purposes.  Advisors and investors should be reviewing existing open, non-registered accounts prior to December 31st to take advantage of a final tax-free account rebalancing, and recognize that with new 2017 tax changes, Corporate Class funds  remain a tax-efficient investment solution.

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Tax-efficient Investing

Tax-Efficient Investing with RRSPs and TFSAs

Everyone loves to invest tax-efficiently, and RRSPs and TFSAs are designed to do just that. But, in addition to the basics of how these plans work, there are considerations that should be kept in mind to maximize their usefulness. In this short webcast, we talk about when to use an RRSP vs a TFSA and discuss capital loss planning concepts related to these plans.

Most Canadians aim to invest tax-efficiently. This can mean different things to different investors and can include, among others, the use of RRSPs, TFSAs or corporate class mutual funds. Understanding Canada’s tax laws can go a far way in helping to minimize taxes payable, which paves the way for a tax-efficient accumulation of assets over time.

About us

CI’s TREP Team enhances the tax, retirement and estate planning experience through education and communication for wherever life takes our clients.

For further information on TREP, please contact your CI sales team.