After the requisite political theatrics and rhetoric, the Federal Government passed the motion to enact the increase in capital gains taxes effective June 25th, 2024. That gives a small window for those with substantial unrealized capital gains to decide what to do, if anything. To do nothing will often be a reasonable decision, but it is not good blanket advice. You’ll rest easier knowing that the important parameters for your situation have been considered. This is also an opportunity to consider more general but more important parts of your planning. Much of that is not mathematical.
The best answer is just about always situation-specific and I cannot give situation-specific advice. However, I will share a summary of my thoughts on some of the big questions that I have been analyzing. Hopefully, to give some practical guidance, general intuition, and perspective for you to have further planning discussions with your tax and financial advisors. As mentioned in our special episode of The Money Scope, this topic bridges both those domains, making being an educated client vital.
Disclaimer: These are just my thoughts and opinions. It is not specific advice – consult the appropriate professionals for your situation. Also, I really am a doctor. I just finished a week of clinical service and that is where my focus was this week. So, this may not be as polished as my usual posts, but I felt that time was of the essence. Feel free to point out anything that I have gotten wrong or simply made more confusing. I have tried to distill some complex stuff.
Who Should Not Worry?
Unfortunately, the claim that only 0.13% of Canadians are impacted being touted by the Government is so obviously misleading, that it has many people wondering if it will matter to them. Incorporated business owners, anyone with an investment or recreational property, or dying with more than $250K of assets beyond their principal residence will be impacted. Those people don’t have an average income of $1.2MM/yr. The reality is that Canada has had ballooning costs and deficits. In the absence of productivity increases from the spending, today’s deficits are tomorrow’s taxes and/or inflation. We’ve now moved on to the taxation phase.
Even if the above situations apply to you, worrying about it doesn’t change it. The practical questions for us, as individual tax-payers, is whether there is something that we need to do before June 25th to mitigate that. I will start with who should either not worry or for whom there is nothing you can do.
Illiquid Assets Sold to Third Parties
There is not likely enough time to sell a relatively illiquid asset, like a business or real estate, and have it close before June 25th. If you could, there would be a major compromise on price. The closing date matters. Transferring real estate to family members has other considerations. However, with the $250K/yr per person exemption, there is no rush to do that from what I can see. I’ll expand on strategies later.
Corporate Owners Who Don’t Draw Income
Some corporate owners don’t draw much income from their corporations as salary or taxable dividends. They live off of income from outside their corporation. Such as other personal income or investments. In that case, the situation is similar to personal capital gains.
The tax savings from realizing a gain at the lower inclusion rate is out-paced by tax-deferred growth over time. That break-even point is only marginally longer than with personal accounts. More on that later, but if they were not planning on selling in the next 5-10 years, then “do nothing” is usually the right answer. The other caveat that I think corporate owners should consider in this situation is what their exit plan for the corporation is. If they are likely to die in the next 5-10 years, it may force the gain. That doesn’t matter if the plan is to donate the appreciated securities to charity. However, if the plan is to spend that money – that is better done gradually while alive.
Corporate Owners With Small Gains or Expensive Accountants
The cost of realizing a capital gain in a corporation is not just the tax. There are also accountant fees to file the special election to be able to pay out the non-taxable portion of the gain. That is tracked by the CDA and paid out as a capital dividend. A capital dividend is a tax-efficient way to get large chunks of money out of a corporation. However, it is not efficient if it is a small gain and your accountant charges a lot of money for the paperwork.
The tax saving is ~10% at the old vs new inclusion rate. Paying a $2K accountant fee for a $20K capital dividend from realizing a $40K capital gain would just be exchanging fees for taxes. I have seen fees ranging from free with corp tax filing to $3K. If that $3k was for a simple ETF portfolio – it is time to consider finding a new accountant.
Who Should Take Action?
There are several situations when I think that taking action before June 25th, 2025 is important. How long before depends on the type of asset with the unrealized capital gains. Something complex to sell or transfer, like real estate requires more time than is likely available. However, for publicly traded securities, like mutual funds, ETFs, or stocks there is time.
It is the settlement date of the sale that matters. ETF and stock markets recently changed to a T+1 settlement date. That means as sale settles at the end of the day after the day that the trade was placed. The last trading day that will settle before June 25th is June 21st.
Time To Rebalance Your Portfolio
This may be a good time to rebalance your portfolio. Sell some of the gains and buy more of the assets that have been trailing if they have strayed from your target asset allocation. This manages risk by staying diversified. It requires discipline and is hard to do when something has been smoking hot. The key is to do it when you have money to add or around once per year. However, this may be another good time. I sold some of my Nasdaq 100 to add to my US small-cap value & Canadian index last week. It was hard. Getting some tax savings helped motivate me.
Rebalancing does not apply if you are using an all-in-one asset allocation ETF that does it for you. That is one of its many advantages.
Improving Your Investing Strategy
Beyond rebalancing, this may be an opportunity to take the leap and improve your investment strategy. Selling the pieces of a sub-optimal strategy, realizing those gains at the lower tax rate. Selling to settle the trade before June 25th is the key action. Re-buying into the market could be same-day or when you’ve made the necessary moves to start your new strategy. What do I mean by that?
One way to improve is to simplify and diversify. Like switching from individual stocks to broad ETFs or even an all-in-one ETF. Another way to improve would be to switch from high-fee mutual funds to an ETF-based strategy or lower-cost quantitative-based mutual funds like DFA. That may mean switching advisors if your advisor is tied to selling high-fee mutual funds. Again, the sale-side is the key event before June 25th. I know it is scary, but this may be another nudge to take action. Even selling and taking over part of your portfolio could cut costs and allow you to build experience and confidence.
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You Plan on Selling & Withdrawing Money Soon
Whether it is a personal or corporately held investment, if you were planning on selling and realizing capital gains soon anyway. Then, doing that before June 25th, may save more tax than is lost by truncating tax-deferred growth. I’ll expand more on what I mean by “soon”, but I just want to highlight a few times when this is a consideration.
The obvious situation is a planned splurge. With a corporation, that could be planned using some income smoothing. That is usually done by flowing through active income as salary and taxable dividends. Perhaps, with an assist to spread it out over more tax-years using a shareholder loan. If some of the money must come from selling investments, then beating the capital gains tax increase may help. The longer-term situation is drawing down a corporation during retirement and estate planning. What action to consider in that situation depends on multiple factors that I will touch upon at the end of this post.
Secondary Personal Real Estate
I mentioned earlier that there could be some considerations about passing on real estate to other family members. When you die or transfer ownership of real estate to someone, including family, that is considered a deemed disposition. Even if money does not exchange hands, it is like a sale at fair market value and capital gains taxes are triggered. So, it should not be a surprise that someone gifting property will also need to come up with the cash to pay the taxes. Or possibly get some actual cash from the beneficiaries to cover them. That still surprises some people – plan for it.
Should it be sold or shared?
Real estate is not a simple gift. It comes with obligations, like maintenance and ongoing taxes. It is also hard to split into pieces. So, the first consideration is whether to gift the property or to actually sell it and gift the proceeds. It is easier to split up money fairly than fight over who uses the family cottage when. Or who is going to do the maintenance or pay for it. There are also costs and hassle to sell the property. Plus, fights over whether or when to sell.
Previously, it may have been preferrable to sell and gift the proceeds in advance and spare the provocation of family disagreements. The capital gain could be born by one or two people the same as more people. Now, with the $250K/yr/person threshold, there could be other planning options to consider. One is to have multiple owners beyond a parent or couple.
Gifting Before June 25th
While a sale to a third party may be almost impossible prior to June 25th, a gift to four adult kids may not be and would beat the inclusion rate increase. If the property is to still be used for many years, the future gains could be split by the four beneficiaries with up to $1MM of the capital gain taxed at the lower rate.
That may sound attractive. However, there are a few other considerations to be aware of. If the gifting parent still has beneficial use of the property, this is one of those bare trusts that now may require annual filing. That doesn’t mean taxes are due, but there would likely be a cost in accounting fees and/or time.
The more pressing issue is that there would be taxes due this year on the capital gain up until now. Planning for that cash requirement is vital. Another alternative could be to transfer partial ownership incrementally over time. That would require some extra legal and tax advice if being considered.
Capital Gain Reserves
If money will actually change hands, there is also an option to spread the tax bill out over multiple years using a capital gain reserve. If the sale closes, but the money is paid in installments over multiple years. That results in a capital gains reserve. It can defer and spread out the tax bill over up to five years (ten in specific cases).
Unfortunately, the draft legislation confirmed that the inclusion rate at the time money is received will apply. If an individual already has a really large capital gain reserve that they cannot spread out as <$250K/yr or it is a corporation with no threshold, they may want to consider taking them this tax year. It is money that will be taxed soon at a higher rate. However, that must also be balanced against whether it will bump the individual to higher tax brackets.
For the real estate sale example, if the capital gain each year is under $250K, then it is taxed at the old inclusion rate. Staying below $250K/yr year and keeping the income spread out to stay in lower tax brackets will usually result in less tax. However, there is also the opportunity cost of getting the money later instead of now in terms of buying power lost to inflation or investment returns if the money is destined to be invested. That may not matter much for transactions within a family, but it certainly would with third party money.
The Death of Incorporation?
With the $250K/yr threshold for individuals, but a higher tax rate on the first dollar of capital gains in a CCPC, there has been a lot of chatter about how this makes incorporation useless. It doesn’t. However, it does highlight some important planning considerations.
Non-Investing Benefits of Incorporation
Corporations are not just about tax-deferred investing. For business owners with variable income due to business cycles, parental leaves, or other factors driving you into high tax rates in some years that you don’t make up for in low-income years – a corporation still smooths and regulates cash flow. There is also the benefit of dividend-splitting for active shareholders or when the owner is over age 65.
Some corporations may help to isolate liability. Not for professional corporations, but it may apply to real estate investing or other businesses.
Tax Deferral is Still Powerful
Tax-deferred investing is very powerful over longer periods. The benefit of not realizing personal capital gains despite a known impending tax increase highlights this. A corporation offers partial tax-deferral on active business income. Low corporate tax on income now and the rest of the tax to access the money later. In the interim, more retained earnings can be invested than if the tax were all paid upfront.
A corporation still has the advantage tax-deferral for capital gains plus the advantage of more initial capital due to tax deferral on business income. In provinces with normal tax integration, that made harvesting capital gains very similar to delaying.
Corporate Investments Can Be Tax Efficient
Even though tax integration makes the ultimate tax rate higher than personal investing on interest, foreign dividends, and now capital gains. The growth of the invested capital that would have already been lost to tax compounds over time.
A corporation can be tax-efficient if you not only earn enough to have retained earnings to invest, but also spend enough to require flowing money out as salary and dividends. If the RDTOH is kept flowing by paying out dividends each year close to what it receives in passive income, the net effect is an annual tax drag of (50% tax minus 30% RDTOH = 20%). That approximates the lowest personal tax bracket. You pay personal tax on the dividend income. However, that is not a penalty if you already require the money to live on regardless.
The alternative to investing through a corporation when your registered accounts are full is personal investment taxation at your marginal rate.
Other Investment Opportunities
Finally, a corporation opens the door to an individual pension plan (IPP) which could shelter more than an RRSP. If you really want to use life insurance as an “investing vehicle”, it is also less unattractive when purchased with partially taxed corporate money. In both cases, this change still does not make using an IPP or insurance vs a corporation a slam dunk. Despite the heavy marketing that seems to follow every corporate tax change. Both options may be useful as part of a much larger plan, but there are situation and preference-specific considerations. More analysis is planned.
Corporations Are Less Useful At Lower Income & Spending Levels
One of the big drivers that I found in my modeling as to whether it made sense to harvest capital gains in a CCPC before June 25th was personal consumption. To take advantage of corporate tax deferral and keep corporate investing tax-efficient requires an optimal mix of salary and dividends. It is much easier when you spend a lot to pay out enough dividends to get release RDTOH refunds to the corporation. Plus, higher spending may also mean more salary to take advantage of the RRSP room generated.
If the business income is low and personal spending high enough that there is little left in the corporation to invest, it makes a corporation unattractive. Yes, you could use dividends-only to retain more in the corporation. However, if that comes at the expense of not maximizing an RRSP and TFSA it is detrimental. Not only does an RRSP and TFSA offer tax-sheltered growth, an RRSP also has full tax-deferral. In contrast to the tax-exposed growth and partial tax-deferral like a corporation. Plus, we’ve already seen how a corporation makes a much easier political tax-target.
Corporate Capital Gains Harvesting FAQs
I have already written extensively on how corporate capital gains harvesting works. I also described a few different scenarios to illustrate different points in Ontario, BC, and Quebec (English & Francais). This section is to pull together some of my main observations and a couple of FAQs. If you have a good use for extra personal cash, then harvesting capital gains and using a capital dividend to fund that extra cash flow need often makes sense. Where it is more uncertain is when there is not an immediate need that you couldn’t just use other money for. The use of the money is important.
Catching Up on Unused Registered Account Space
For those who have neglected using their TFSA because they were advised to “keep it all in the corp” instead. A capital gains harvest is a good option. They likely have a large enough capital gain to justify the capital dividend accountant fee and it catches up in one year with minimal extra fuss. This option is particularly attractive in Ontario and New Brunswick if the capital gain allows the owner to take advantage of the passive income limit SBD shrinkage GRIP anomaly. Provided it isn’t closed in the next year or two.
In other provinces with normal tax integration, the advantage of using a capital gains harvest to catch up on a TFSA is minimal. At lower income and spending levels, using a slight salary increase could even be better if it also results in more RRSP room and a minimal personal tax bump. That could be optimized further by spreading it out over several years. That will require some more situation-specific tax planning advice.
For unused RRSP room, I still favor using a T4 bonus from the corporation. That bonus means no corporate tax and because it is contributed to an RRSP – no personal tax either.
Investing Excess Cash in a Personal Taxable Account
I didn’t write much about this option, but I did include it in my corporate capital gains harvest simulator. As mentioned earlier, a corporation with enough income flowing out of it to fund personal spending can be very efficient. However, a spouse in the lowest tax bracket could potentially do better than that. Also, a corporation that has RDTOH trapping or passive income limit problems would be less efficient. So, it is possible for personal investing to come out ahead. However, the corporate tax deferral is otherwise tough to beat.
That corporate advantage also assumes that corporate taxation doesn’t become more punitive relative to personal investing. Having some personal taxable accounts investments mitigates future tax risk. It is after-tax money. Yes, it accrues a new capital gains liability and taxes on future income, but a big tax liability was removed first.
Using a Capital Dividend to Boost Tax Deferral
The other way to use the excess cash from a capital dividend is to reduce the amount of regular income you pay out of your corporation. Live off that money and pay less salary or dividends. The net effect of that is more money left in the corporation. That increased amount tax-deferred money invested in the corporation is powerful over time. However, if your personal spending requirement from the corporation is low, reducing salary also means less RRSP room.
Putting those factors together, I can make a couple of general comments. In provinces with tight tax integration (most of them), the loss of RRSP room is bad. The RRSP is safer from political tax attacks and has full tax deferral and tax-sheltered growth. So, the net result is similar after-tax money if things go perfectly, but a higher risk that they do not.
Size Matters
Personal consumption rate vs the size the capital gain also matters. A high level of personal spending that still requires >$175K of salary even after a capital dividend does better than a lower level where RRSP room is lost. The size of the capital gain is the other part of that equation. A really large capital gain means more salary shrinkage if it takes many years to work through. That could translate into a smaller RRSP and slightly larger corporation. Not necessarily desireable for the reasons mentioned in the previous section.
What to Consider Now?
I have gotten a number of questions about the process. I have post about it with pictures and descriptions for harvesting the gain and then how processing the harvest unfolds over time. A couple of other clarifications about time line are still in order.
The main questions to address now are: 1) Does it make sense to harvest the gain or do nothing? I have hopefully explored many of those considerations in this post and others. 2) If so, then how much would be used in a timely fashion over a year or two to clear out the RDTOH and CDA generated? Beyond that, the most important part is selling and crystallizing the gain before June 25th.
Again, this type of decision is complex and situation specific. So, it is advisable to discuss this with your tax expert. Many have not looked deeply into the issue, but hopefully you bringing up use of the CDA and other options like changing compensation mix will start a good discussion.
What Happens Later?
That will trigger corporate taxed on the taxable half of the gain due at corporate year-end filing. I would personally, re-buy my holdings to stay invested until then. At tax time, the taxes could be paid with uninvested operational cash or by some selling to free up some cash, if required, at that time. Between now and corporate tax time, I would also consider whether I need to make changes to pay out enough dividends to release the nRDTOH from the taxable part of the gain. If so, that would reduce the amount of corporate tax due because of the refund.
Another common question is about when to pay out the capital dividend. It does not happen right away. Usually, I do this after corporate tax filing. That way my accountant has just done most of the work to track my gains and CDA already. So, it should cost less to do the special election paperwork. After that has been approved by CRA, I pay out the capital dividend. Again, that could be paid from operational cash and no necessarily from the corporate investment account.
CCPC Owner Retirement & Charitable Giving
Retirement Drawdown: Income vs Capital
I didn’t get the chance to publish modeling on this, but I have a mostly-working offline simulator. There are some principles that I think are important. If simply flowing out interest and dividends from the corporation without selling investments, the usual balance between tax savings vs tax deferral should apply (ie a breakeven point).
If you must sell some of your investments to fund your spending. Then, perhaps selling a few years’ worth now instead of later (after the breakeven point) makes sense. Especially if you can use a capital dividend to invest personally and reduce your personal income for a few years. PWL’s calculator looks at this breakeven for a corporation if you toggle it to a corporation. That could actually be a substantial capital gain given that the break-even point is further out (~10-11 years) than with a personal account benefiting from the $250K/yr exemption.
Charitable Donation Plans
Another factor to consider is charitable donation of appreciated securities (like stocks, ETFs, or mutual funds). Those donations continue to have the full capital gain credited to the CDA. So, whether the inclusion rate is 50% or 67% doesn’t matter. Strategically, if I were to likely be donating securities to charity, I would not mess with those holdings. Further, I’d take a good look at my portfolio to identify the holdings with the highest percentage gains for that purpose. Some people may leave this until they die. However, giving while alive is usually better as you progressively have more certainty that you’ll have excess.
Lessons & Opportunities
Congratulations if you have made it this far. There has been a lot to take in over a short period of time with these capital gains tax changes. I didn’t even have time to make fun pictures or memes for this post. While some of the political discourse has been unfortunate, I think that this has also led to some people taking a better look at what they are doing.
This is an opportunity to make positive changes to your portfolio. It is also a chance to discuss optimal salary and dividend mix with your accountant. With a renewed appreciation for the benefits of diversifying against tax risk by using your RRSP and TFSA in addition to a corporation.
For those who have not incorporated, this will hopefully make you consider that decision more carefully. Especially, whether you should pay down debt and max out your RRSP/TFSA and other registered accounts first. Also being aware of whether your income and consumption will be adequate to keep that corporation efficient over time.
For those further along in their career with significant investments, this is a good time to reflect. After the rhetoric surrounding the fee clawbacks and tax changes around 2015, my family and I paused and decided to cut back. The exchange of your time for money changes when you realize that you have less time left and the after-tax return for working is shrinking too.
It is also an opportunity to start thinking about how you are going to decumulate over time. You may decide to smoothly spend more money while alive rather than leave a bigger pile for the government to spend when you die. With a large tax bill awaiting your estate at death, giving with a warm hand instead of a cold one also seems even more appealing. Even better, by using appreciated securities to donate to charity. For those considering passing on secondary real estate. That is a complex decision and this change will hopefully spur better family discussion and tax planning. In advance.
Thanks for the wrap up and all the great posts. I’m not taking any gains before June 25 despite having a sizeable gain as my time horizon is another 10 years.
Another reason is to deliberately prevent this government from taking one cent more than necessary.
Watching the theatrics in the House of Commons by this government was embarrassing. Obvious lying, telling untruths, being dismissive of physicians, creating class warfare and demonizing hard workers. The people in this government are absolutely terrible people without ethics or morals and deserve to be unemployed soon.
Hey Dad MD,
I debated making a comment about not rewarding bad behavior, but I am trying very hard not to take the bait. Their goal is clearly to pull forward tax revenue from a few years from now into the present for a short-term bump to their balance sheet. Short-term optics and a larger future problem. Particularly if they kill the goose that lays the golden eggs by stifling investment. That potential impact is uncertain. I would have been much less annoyed if they had been more forthright and less inflammatory. We have spent beyond our means and need to cut spending or raise taxes more structurally. That should just be done in a straight-forward way rather than trying to incite a class-war. Particularly with lies about who it will impact, their average income, that they get paid with capital gains instead of income (not already-taxed income that they then invest instead of spending). Garbage. I support social programming and progressive taxation, but the tone and divisive objective bothers me. What scares me is if this stuff continues. What will be next when they don’t get as much money as they anticipated from this? They likely won’t.
-LD
Since 2016, the recurring theme has been increasing physician taxation. And I also noted the tone of the message from the government. There was a element of “Make The Rich Pay” of the Marxist Leninists. The safe assumption is that this won’t be the last tax increase.
You’ve mentioned many good strategies to deal with this tax increase, but you haven’t mentioned an important one. If you’re starting out as a physician, consider more seriously moving to the USA. The US is not without its own problems, but financial success is looked on less disfavorably there.
Hey Park,
I think that is a real concern, and was raised, but they felt that they could just credential more foreign physicians to fill the gap. We should be and are doing that, but there are actually legitimate challenges with it. I don’t think there will be a mass exodus of mid-career physicians, but the barriers are low for someone starting out to go elsewhere. The US healthcare system has its challenges to work in, but those in Canada have really been mounting for some time now. The tone is also really important. Especially for something like medicine where part of our “social contract” is that we work whatever is required to meet the need, but have some elevated respect in return. Listening to the PM in 2016 and our premier in Ontario at the time vilifying us as greedy while clawing our fees back, while the voting public cheered them on is what caused me to pause and start cutting back. I remember sitting down after a multi-week stretch of call and seeing one of their videos asking us to do “a little bit more” and how we’d been unfairly having it easy. My wife and I looked at each other and asked ourselves why we were doing this to ourselves. That carries into what the residents and medical students see. I saw a lot of that in my attendings during the 90s during the “brain drain”. The pendulum did swing back after crisis levels were hit. Hopefully, it will move closer to center again. It is not just physicians that I worry about. Canada’s productivity has been declining relative to our closest neighbor. Most professions or entrepreneurs are very mobile and used to taking a leap to go where their career will be most likely to thrive. We seem intent on taxing success while offering targeted grants/breaks directed via government to try and compensate.
-LD
I’m still waiting for my exit tax for CCPC post! haha
ended up hedging my bets and crystalized a modest amount of cap gains just now.
if trump loses and trudeau somehow wins again i’ll be contacting the recruiters who keep bombing my LinkedIn inbox. starting to feel like Canada is in a race to the bottom economically, and there are a lot of decent places to live in USA with huge net pay delta from Canada now.
the part thats also starting to get me aside from $ is the crumbling system is becoming very hard to practice in. delays are starting to effect the care i can provide as a outpatient specialist, yet the accountability still rests on me.
Hey Tim,
Yeah, my brain is bit fried from all of the recent work, but it is an interesting topic. I was just looking at Barbados last night 🙂 We aren’t at a good life stage to do that sort of thing right now. However, I have a friend who has been exploring and operationalizing his exit plan. It has been very interesting to chat about the different nuances. With things like AMT and tax treaties plus all of the personal factors, planning over several years is definitely needed. In the meantime, some modest moves keeps options open.
Mark
Thank you for breaking things down with various articles/podcasts. I would have been paralyzed with indecision/confusion without these. Advice from my accountant has been helpful but has not provided me with all the options you have mentioned.
As stressful and frustrating as this has been, it has had the benefit of forcing me to look closely at my investments, rebalance, and develop a more organized approach. The irony being that I have pulled a relatively huge chunk out of Cdn investments (which were overweighted) and put more into US/foreign equity which I am more optimistic about.
Thanks again for taking the time to provide such helpful information!
Thanks Jo. There is a silver lining in this giving us an impetus to pause, recalibrate, and move forward deliberately on stronger footing. A common issue.
Mark
Thanks again Mark for all the work that you and Ben Felix have done. We’re very fortunate to have some with the knowledge and passion that you have producing this content for us. It has been very educational to review.
Thanks Erik. It was a real whirlwind for the last couple of months, but stimulated some interesting thought and discussions.
Mark
Thank you Mark for all the work and explanations that really help MD’s to figure out these financial issues.
I realized all my corp capital gains, so feds will get their cash now. But at least for a while feds will fund multiple kids education via Canada Student Grants/Loans because with enough CDA dividends my taxable income will be below poverty line – oh what luck, my taxable family income will be exactly few dollars below qualifying levels for full educational assistance. Taking a little personal tax holiday despite the higher corporate tax bill this year. Tax free CDA dividends should be enough to last for a couple years of living expenses. Hoping a government that has a grasp of reality and wants to improve productivity and living standards for all will be in power by then. Thanks again, all your information has been very helpful!
Hey SleepyDoc,
I have a friend who was looking at the same thing. They have four kids in Ontario and it is major grants for those with low taxable income. Living off the CDA and some dividends to gradually release RDTOH could mean significant grants. Same with Canada Child Benefit. Or OAS if was getting clawed back.
-LD
Yes, making full use of such income tested programs is one way I can effectively protest the incompetence of this government. (Tougher to do practically if less than 4 kids or so).
If the government wishes to be ridiculous, then they should expect it of us.
Will not be fully efficient for me with RDTOH balances – which I understand thanks to you – plan on couple of years of higher corp taxes and then will flow dividends so RDTOH will get used up over following few years.
I don’t like playing these games and wish the government would just work on improving productivity and investment, making it less likely that my kids have to leave the country with their skills to find quality high tech work one day.
Established successful people will mostly grumble a bit, but carry on. However, I do worry that we’ll see another brain-drain like we did in the 90s to early 2000s for those who are earlier in their careers or mobile. It isn’t just the money, it is the hostility towards success and rhetoric that accompanies these policies that makes people have second thoughts.
-LD