No two financial situations are the same. Your tax bracket, income sources, and long-term goals all play a role in how you should approach tax planning. Yet, many investors follow generic advice that doesn’t reflect their unique circumstances.
At Evans Family Wealth (EFW), we believe your investment strategy—including tax efficiency—should be as tailored as your financial plan. From asset location to investment selection, a thoughtful approach can minimize taxes, grow wealth efficiently, and preserve more for your future. If you’re not getting personalized guidance, it may be time for a second opinion.
Here are some of the top tax-efficient strategies that can make a real difference in your portfolio.
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Maximize RRSP & TFSA Contributions with a Strategic Approach
Registered accounts like Registered Retirement Savings Plans (RRSP) and Tax-Free Savings Accounts (TFSA) offer significant tax advantages:
- RRSP: Contributions reduce taxable income today and grow tax-deferred. Best for those in a high tax bracket now who expect to be in a lower bracket in retirement.
- TFSA: Investments grow and withdraw tax-free, making them ideal for long-term, high-growth assets.
EFW Insight: The right account for you depends on your unique financial picture. At Evans Family Wealth, we prioritize your savings strategy based on your goals, income, and tax situation. Each account—RRSP, TFSA, or non-registered—plays a role in your broader financial plan. For example:
✔ Whether you’re saving for a near-term goal or maximizing compounding over decades, a TFSA provides flexibility without tax consequences.
✔ If you need to reduce taxable income now, RRSP contributions could be the better choice.
✔ If you’ve maxed out registered accounts, non-registered investments become the next step, requiring careful tax planning.
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Asset Location: Put the Right Investments in the Right Accounts
What you invest in is important—but where you hold those investments matters just as much. A well-structured portfolio ensures you’re keeping more of your returns by reducing unnecessary taxes.
✔ Growth-focused stocks & ETFs → Best in a TFSA for tax-free compounding.
✔ Fixed income investments (bonds, GICs, high-interest savings ETFs) → Often better in an RRSP, since interest income is fully taxable in a non-registered account.
✔ Canadian dividend-paying stocks → Well-suited for a non-registered account, as they qualify for the dividend tax credit, reducing taxes.
✔ U.S. dividend stocks & REITs → Typically better in an RRSP, as they can be subject to withholding taxes in a TFSA or non-reg account.
EFW Insight: We structure portfolios to place assets in the most tax-efficient accounts, maximizing after-tax returns. If your portfolio hasn’t been optimized for tax efficiency, it might be time for a second look.
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Use a Tax-Efficient Investment Strategy
High-net-worth (HNW) individuals often hold non-registered investments, meaning more exposure to capital gains tax, dividend taxes, and interest income taxation. To minimize tax drag:
✔ Prioritize capital gains over interest income—capital gains are taxed at 50% of your marginal tax rate, while interest income is fully taxable.
✔ Invest in Canadian eligible dividend stocks—they benefit from the dividend tax credit, reducing overall tax liability.
✔ Utilize corporate class funds or tax-efficient ETFs to reduce distributions that trigger taxes.
EFW Insight: We focus on minimizing tax drag in non-registered accounts, helping you keep more of what you earn.
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Optimize Charitable Giving with Smart Tax Strategies
For those who regularly donate, there are ways to give more while paying less in taxes:
- Donate securities instead of cash: Avoids capital gains tax on appreciated stocks while still receiving a full charitable tax receipt.
- Set up a donor-advised fund (DAF): An excellent way to make tax-efficient donations over time while benefiting from an immediate tax deduction.
- Consider charitable remainder trusts: These allow you to donate while still receiving some financial benefits.
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Take Advantage of Income Splitting
HNW individuals can reduce overall family tax burdens by shifting income to lower-taxed family members:
- Spousal RRSPs: The higher-income spouse contributes, but withdrawals are taxed in the lower-income spouse’s hands in retirement.
- Family Trusts: Distribute investment income or business profits to beneficiaries in lower tax brackets.
- Prescribed Rate Loans: Lending money to a spouse or family member at the CRA’s prescribed interest rate can shift investment income to a lower-taxed individual.
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Protect Your Wealth with Estate Planning & Life Insurance
Proper estate planning ensures your wealth is transferred smoothly and tax efficiently. While no one likes to think about estate taxes, proactive planning can protect your assets and make things easier for your heirs. Key steps include:
✔ Establishing & reviewing your beneficiaries → Ensure your RRSP, TFSA, and life insurance policies align with your estate plan.
✔ Using life insurance to cover tax liabilities → A tax-free payout can offset capital gains taxes on large estates.
✔ Setting up a will & power of attorney → Avoid unnecessary delays and legal hurdles for your family.
✔ Considering trusts for intergenerational wealth transfer → Can help control how and when wealth is passed down.
EFW Insight: Wealth isn’t just about growing assets—it’s about protecting them. At Evans Family Wealth, we work with estate planning specialists to ensure your legacy is structured efficiently.
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Work with a Team That Aligns Your Investments & Tax Strategy
Many investors focus only on returns without considering how much they’ll keep after taxes. At Evans Family Wealth, we specialize in optimizing investment portfolios for tax efficiency, ensuring that every dollar is working toward your long-term goals.
While we don’t provide tax advice, we work closely with accountants to integrate tax-conscious strategies into your overall wealth plan. If your investments aren’t structured with tax efficiency in mind, you may be leaving money on the table.
Final Thoughts
Tax planning isn’t just about filing your return—it’s about structuring your finances to preserve more wealth, grow assets efficiently, and minimize tax burdens year-round.
📩 Curious if your portfolio is optimized for tax efficiency? The Evans Family Wealth team can help you make the most of your investments. Book a free consultation today!
