• A capital loss on shares of a company listed on the former  Canadian Dealing Network, now Tier 3 of the Canadian Venture  Exchange (CDNX), might qualify for ABIL treatment if you can establish  that the company has not elected to be treated as a public corporation for tax purposes.

• An election under the Income Tax Act to claim a loss  on debt or shares of an insolvent company applies to claiming capital losses even where the company is (was) public.

• Carrying charges for purchasing Canada Savings Bonds (CSBs) through a payroll deduction plan are eligible for the interest expense deduction by Accountant in Caledon.

• A taxpayer can deduct fees (but not commissions) paid for advice received with respect to the purchase, sale and administration of specific investments, such as shares or securities, provided those fees are paid to a professional whose principal business involves managing such investments.

• If you earn more than your spouse, you could reduce your family’s combined tax bill by paying your spouse’s expenses, thus allowing them to save their money for investment purposes. The income and gains from these investments would then be taxed in your spouse’s hands at their (presumably lower) tax rate. This strategy will also help you even out future retirement income if you have been able to invest in a tax deferred retirement plan and your spouse has not.

• If you earn less than your spouse, keep a clear record of the source of your investment funds to ensure that your investment income is attributed to you. This could be accomplished by, for instance, depositing your personal income into a separate bank account   rather than a joint account. Then those funds could be used to make investments in your name.

• If you loan your spouse or common-law partner funds, with interest payable at least annually at the lesser of prescribed or commercial rates, and your spouse/common-law partner invests those funds to achieve a yield exceeding the rate of interest you charged, that excess income will be taxed in your spouse/common-law partner’s hands according to Tax Accountant in Caledon.

• A loan may be preferable to an outright transfer, since after realizing the gain the transferee could repay the loan and keep the gain, free of future attribution. If cash is not readily available, consider lending investments.

• Loans to family members, if used in an active business, will not result in attribution of the proceeds of any subsequent business income or gains.
• Parents often contribute to investment accounts held in trust for their children. To avoid attribution of capital gains in that instance, care should be taken that such “in trust for” accounts qualify as irrevocable trusts. To qualify, the terms and conditions of the account must serve to divest, deprive or dispossess the parents of title to deposited funds. If the parent has the right to withdraw those funds for their personal benefit, the account will not qualify as an irrevocable trust.

• If you and your spouse or common-law partner is receiving approximately the same level of benefit prior to an assignment, splitting CPP benefits will not likely be worthwhile. But if one partner receives greater benefits and has a higher taxable income than the other, you may achieve some advantage.
• For information please call your Tax Accountant in Caledon at 905-794-8283.