Hot off the Press: Maili was interviewed for The Globe and Mail newspaper to share her insights on how Ottawa’s hike to capital gains inclusion rate affects trusts – article by Brenda Bouw, The Globe Advisor for The Globe and Mail.
Click here to find out what Maili had to say on the topic:
Canadians using trusts for financial, estate and tax planning purposes are reviewing their structures and effectiveness in light of the pending hike to the capital gains inclusion rate. Ottawa announced in its latest budget that trusts, alongside corporations, will see their capital gains inclusion rate increase to 66.67 per cent from 50 per cent annually starting June 25. The increase applies to capital gains earned within a trust. Individuals, including those who receive money from trusts (known as beneficiaries), will also see the same 33-per-cent increase but only on capital gains of more than $250,000 annually.
Maili Wong, senior wealth advisor and senior portfolio manager with The Wong Group at Wellington-Altus Private Wealth Inc. in Vancouver, says trusts can also use life insurance to offset higher taxes and help preserve an estate.
She notes that assets moved into a life insurance policy, including policies owned by trusts, may be tax-sheltered when the trust is the owner, payor and beneficiary.
“It creates a tax-free lump sum of money that will be paid upon the passing of the lives insured [who can be the business owners], and it’s liquid, so it can help pay the higher amount of taxes owed,” Ms. Wong says.
She adds that the 21-year deemed distribution rule for assets held within a trust doesn’t apply to life insurance policies held by a trust in Canada.
For more on how these Federal Budget proposed changes may impact you and your wealth plan, please feel free to contact The Wong Group at 778 655 2410.
If you have any questions about how this relates to you or your investment portfolio and financial plan, please give us a call at 778 655 2410 or email us at thewonggroup@wellington-altus.ca
Sincerely,
Maili Wong, CFA, CFP, FEA
Senior Portfolio Manager & Senior Wealth Advisor
Wellington-Altus Private Wealth Inc.
Board Director
Wellington-Altus Financial Inc.
Maili Wong is a senior portfolio manager and senior wealth advisor at The Wong Group at Wellington-Altus Private Wealth and the Amazon best-selling author of ‘Smart Risk.’ She has over two decades of experience in the finance industry and was named a Top Wealth Advisor and one of the Best in Province in the 2022 rankings produced by The Globe and Mail and SHOOK Research.
