M A R C H / A P R I L
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5 TAX TIPS
OUTSIDE THE BOX! Now is the time to plan for tax savings in 2019 and beyond. Combining proven and prudent tax planning with sound investment management can make a big difference to your wealth. Here are five lesser known tax strategies to help you do just that. 1) Perhaps you are selling your business, stock options or getting a large inheritance?
Spousal Loans when properly
structured
earning
allow
a
higher
partner
investment income to a lower income partner.
to
transfer
Since it is a
loan, the lender can request the capital be repaid down the road when circumstances warrant, yet in the interim it’s a powerful method to transfer tax liability on investment income and realized growth. Want more good news? The interest rate is prescribed by CRA and is only 2% at this time and set for the life of the loan. 2) Limited Partnership/Flow Through Resource Funds offer tax deductions anywhere from 95% to 150% depending on province of residency.
Once your income exceeds $94,000
while working or $76,000 when receiving Old Age Security (OAS), the tax savings can be rewarding.
Michael Prittie, CFP, CIM FCSI, CIWM is a Portfolio Manager and Branch Manager with Mandeville Private Client Inc/Capital Wealth Architects in Ottawa.
While investing in
resource-based securities brings higher risk, this is mitigated by the higher taxation and claw back of OAS at higher rates. This is especially true for single (widowed) taxpayers in retirement
time, an investment in a similar investment in the same sector can
where pension income splitting can no longer be utilized.
be an option. Likely a win-win scenario for you. 3)
Debt Swaps can turn non-tax-deductible interest into tax
deductions.
Do you have non-registered investments and a
5)
Properly structure your investments to shelter income inside
your RRSP/TFSA accounts and favour equites in your non-
By strategically making some minor
registered account. Further, Corporate Class structures take this a
changes you can turn that situation around and deduct the
step further to keep taxable income away from…well you know who!
interest on next years tax return.
It is possible to meet your objectives and asset allocation needs by
car loan or mortgage?
Like most strategies, there
are some caveats, however by following some simple rules it can be easily accomplished. 4)
Tax Loss Selling opportunities are often ignored or
overlooked.
Did you or your advisor spend time in December
carefully reviewing your investment portfolio for any securities or funds that had declined in value from original cost?
By
strategically disposing of losers you can use the tax loss to offset other capital gains in the current year or repatriate tax paid on capital gains over the past three years. One just needs to be careful to avoid the “superficial loss” rules.
If you are
worried about missing out on a potential upswing during that
properly utilizing the right investment strategy.
We help advice seeking clients create and preserve wealth through fee-based professional portfolio management and through financial planning initiatives like those above. For those who wish to learn more, we offer a great cup of coffee and a non-biased second opinion. This information is intended for informational purposes only and is not intended to constitute investment, financial, legal, tax or accounting advice. Many factors unknown to us may affect the applicability of any statement made to your particular circumstances. Consult your financial advisor or other professionals before acting on FACES MAGAZINE | 75 any information. Mandeville Private Client Inc. is a member of the Investment Industry Regulatory Organization of Canada and a member of CIPF.