An often-overlooked component of portfolio construction is tax efficiency. Tax can significantly erode one’s overall investment returns.
We help our clients navigate the complexities of the tax landscape and implement effective investment allocation strategies. The first step in our process involves gaining an in-depth understanding of your financial situation. This understanding allows us to craft personalized investment plans that incorporate tax-efficient practices, specifically tailored for individuals, trusts and corporations. These plans include the use of tax efficient investment vehicles, asset location strategies, and careful consideration on the timing and types of investment income. Our goal is to optimize after-tax returns, increase eligibility for tax benefits, and provide our clients with peace of mind, knowing their investments are structured in a tax-efficient way.
Investing within a corporation presents its own unique tax considerations. Corporations generating active business income attract a lower tax rate, which can provide more after-tax funds for investments. However, the types of income these investments generate – whether interest, Canadian dividends, foreign income, or capital gains – are subject to different tax treatments. Understanding the tax rates on each as well as the implications to your small business deduction and your notional account balances is critical for tax efficient investing. Our aim is to assist you in making informed decisions that align with your business and personal financial goals.