Tax Efficient Income & Growth

We are privileged to live in Canada – an orderly society that offers compassion and care to those facing adversity. But this social safety net and global outreach requires money galore, making Canada one of the highest taxed nations on Earth. Our tax laws and regulations are enormous and complicated, so careful tax planning within the permitted areas requires sound and informed advice.

PLEASE NOTE THAT I AM NOT A TAX ACCOUNTANT OR LAWYER, AND THE ADVICE I GIVE IN TAX PLANNING IS CONFINED TO THE INVESTMENT ASSETS WHICH I MANAGE FOR CLIENTS IN NON-REGISTERED PLANS.

Whenever I am asked to build a portfolio for a client using non-registered investments, I caution them about the tax on investment income, and that any proposal I make should be confirmed with their accountant.

In the mutual fund industry, there are classes of funds that provide a good measure of tax efficiency for investors, either with or without income requirements. These funds are called “corporate class” and, depending on their asset class, may not yield taxable income.

Over many years, I have acquired several clients that are small business corporations and have invested their surplus cash using corporate class funds. These have been very successful in securing reasonable growth and optimum tax efficiency within perfectly legal tax planning strategies.

Tax and retirement are inevitably tied together – maximizing tax-deferred plans like RRSPs and TFSAs are critically important during working years. However, upon retirement, income from RRSPS/RRIFS, CPP, OAS, other pensions, and income from non-registered investments are all taxable. At Pathwise Financial, we offer guidance to clients of all ages and incomes to set themselves up in the most tax-efficient way for now and the future.