Increasing Your After-Tax Investment Return

Effective wealth management is achieved by implementing the asset allocation of your portfolio in risk-adjusted terms and then
maximizing the after tax return that you receive.  Your investment goals only can be met with returns you keep after you have paid
the applicable taxes.

The successful tax management of your investment returns can be achieved by:

Reducing or eliminating the effective tax rate you pay on the return you receive
Deferring when you pay

Reducing the Effective Tax Rate of Your Investment Return

Your after-tax investment income will depend on factors unique to your own circumstances, such as the province you live in, any
allowable deductions and your total income from all sources.

Your marginal tax rate is the rate of tax that is applied to an additional dollar of income you receive.  Investment income is generally
added to your taxable income after income from all other sources has been calculated.  As a result, each additional dollar of
investment income is considered to be taxed at the highest marginal rate that applies to you.

There are three sources of investment income from a securities portfolio.

Interest income is generally taxed at your highest marginal tax rate.
Eligible dividends receive a tax credit are generally taxed at a lower rate than interest income.
Capital gains result when an asset is sold or transferred at a price that exceeds its initial purchase price.  One-half of a
realized capital gain is received tax-free, while the remainder is taxed at your highest marginal tax rate.

Since different rates of tax apply to varying sources of investment income, there are opportunities available to reduce the amount of
tax payable on your investment income by altering the sources of your investment return.

The tax you pay on investment income can also be completely eliminated by effectively utilizing a registered Tax Free Savings
Account (TFSA).

Deferring When You Pay Tax

After-tax income can also be managed by implementing appropriate tax deferral strategies that:

-  allow for taxes to be paid at a future time when a lower marginal tax rate may apply

-  through maximizing the compounding of your investment return by sheltering investment income from annual taxation using
registered accounts such as a Registered Retirement Savings Plan (RRSP) or Registered Education Savings Plan (RESP).

Investments strategies with a high level of portfolio turnover generally create greater capital gains tax liabilities for investors than
strategies with a low turnover.  As a result a lower portfolio turnover results in a more tax efficient portfolio asset allocation.  Most
Exchange Traded Funds (ETFs) tend to have low portfolio turnover which reduces taxable realized capital gains and maximizes the
positive compounding return of your portfolio.


Reduce or eliminate the effective tax rate you pay on the return you receive.

Structure your investments to defer when you pay tax.

Co-ordinate your investment income to reduce the Old Age Security claw-back.

Use covered call strategies to maximize tax efficiencies.

Structure your investments to reduce foreign withholding taxes.

Structure your investments to reduce exposure to U.S. Estate Tax.

Offset realized capital gains with yet unrealized capital losses on an annual basis.


Benefit by receiving a tax- efficient rate of return that is unique to your personal circumstances and investment goals.

Contact Us:  Winnipeg:  1.855.989.6200 / Calgary:  1.855.804.3582 / Vancouver:  1.604.609.6177