starts 11:30 advanced tax planning strategies presented by: kurt rosentreter ca, cfp, clu, tep, fma,...
TRANSCRIPT
Starts 11:30
Advanced Tax Planning Strategies
Presented by: Kurt Rosentreter CA, CFP, CLU, TEP, FMA, CIMA, FCSI, CIM
Chartered Accountant Senior Financial Advisor, Manulife Securities Incorporated Certified Financial Planner, Manulife Securities Insurance Inc.
About Kurt Rosentreter• Chartered Accountant• Twenty years of experience in personal finance.• Past co-founder of the national wealth management
practice at one of Canada’s big four accounting firms.• National best selling personal finance author; six published
books in Canada.• More than 500 published articles and interviews for The
Globe and Mail, National Post, CBC, Canada AM, Canadian Business and Maclean’s.
• Personal Finance Course Instructor, Ontario Institute of Chartered Accountants
• Senior Financial Advisor, Manulife Securities Incorporated* in Toronto (*Member CIPF).
• Certified Financial Planner, Manulife Securities Insurance Inc.
Complete a Draw Ballot!
• Draw for four books at the end of this 30 minute presentation
• Draw ballots available at front of room
• Drop in basket at front of room• Only completely filled out ballots will
be winners.
Agenda
• Tax planning defined• Tax planning and your family• Tax planning and your investments• Tax planning and your life insurance• Tax planning and your children’s savings• Tax planning and your real estate• Tax planning and your estate• Tax planning and your retirement• Next steps
What is tax planning?
• Tax planning vs. tax return preparation – not the same
• What tax planning is not…• Should you prepare your own tax return?• How do you recognize an expert tax planner?• What does it cost to hire an expert tax planner?• When does tax planning occur?• What areas does tax planning involve?
• Income – what everyone is used to thinking about taxes• But also includes:
– Real estate, investments, estate, insurance, family, career, debt and more.
• When is the last time you had some tax planning?
Areas of your Plan That Taxes Impact
Goal Setting
Pre-retirement Financial Plan
Career Compensation & Benefits Planning
Tax Return Preparation & Tax Planning
Estate Planning & Estate Wind-up Services
Use of Debt
Legal Risk ManagementPersonal
Insurance Strategies
Post Retirement Income Design
Elder Care
Real Estate Strategies
Children
Financial Planning
Philanthropic and Legacy Planning
Personal Investment Program
Tax Planning and your Family
• View all family members as part of your tax planning team
• Different average tax brackets• Different marginal tax brackets
• Factors to consider before tax planning
• Existing tax liabilities attached to assets• Legal risks of family members• Your need for the asset / money
Tax Planning & Your Family• Examples of Tax Planning Among
Family Members:• Bad Examples:
– Elderly mom making her house jointly owned with son
– Couple making a bank account joint
• Good Examples:– RESPs– Spousal RRSPs– Employing family in a business– Pension income splitting– Spousal loans and reinvestment
Tax Planning & Your Family • Beware Joint Ownership and Gifting
for tax breaks!!!– Examples of disasters:
• Elderly mom & daughter sharing a bank account• Grandmother putting money away for granddaughter• Giving money to adult children to buy a first home• Giving money to adult children to pay off a mortgage.
• Considerations: legal, tax, asset control, your need.
Tax Planning & Your Investments
• Need to differentiate between taxable savings and non-taxable savings (rrsps, tfsa)
• Each type of accounts warrants tax smart techniques:
Different strategies Different products Different fee approaches
Tax Planning & Your Investments
• Seven Dimensions of Tax Smart Investing
1. Tax smart investing and People involved2. Tax smart investing and Products utilized3. Tax smart investing and the type of
account4. Tax smart investing and the fee approach5. Tax smart investing and international
aspects6. Tax smart investing and time period7. Tax smart investing and account ownership
Tax Planning & Your Insurance
• Life insurance• Grows tax deferred and pays out tax free on
death• Loans from policy can be tax free• Corporate owned life insurance can be paid
for with lower taxed dollars
• Disability insurance• Benefits are tax free if paid out of after-tax
cash flow
• Critical illness insurance• Tax free benefits
Tax Planning & Children’s Savings• Methods to Save Money for Minor
Children:• RESP • In trust account• Formal Trust
• Key analysis factors:• Control over the money, Tax treatment of
income, Fees, Investment products
• Notable: grandparents should not own savings plans; can catch up missed years
Tax Planning & Real Estate• Three main types of real estate:
– Personal residence– Principal residence exemption– Business out of the home
– Cottage– Taxable capital gain on death or sale or deemed
sale– Use of principal residence exemption– Renting out your cottage
– Rental property– Tax treatment on death or sale or deemed sale– Income splitting– Incorporation
Tax Planning & Your Estate• How do taxes work when I die?• Make sure your Will had a tax review• How much tax will your estate pay
and where will the money come from?
• Do you need life insurance for estate taxes?
• What are probate fees/costs and how to avoid them?
• Is it better to trigger taxes now or wait until you die?
Tax Planning & Retirement• Manage the composition of your
retirement income mix (pensions, CPP, OAS, RRSP, RRIF, part time work, investment income)
• Manage clawbacks: age credit, OAS– How? Incorporate investments or buy
deferred growth products• Pension credit• Pension income splitting
Tax Planning & Retirement• Say no to reverse mortgages• Don’t give away your money to kids
to run from taxes – dangerous• Should you borrow money to invest
in retirement?• Should you buy life insurance to
shelter against taxes in retirement?
Tax Planning & Retirement• Spousal loans at prescribed rate• Buying assets from lower income
spouse• Pay investment counsel fees, not
investment commissions• Open TFSA accounts and hold
interest bearing investments inside• RRIF withdrawals: timing in
retirement, timing in a year, spouse’s age if younger.
Conclusions
• Everyone needs an expert tax review every 3 years at a minimum.
• An investment portfolio cannot be built properly without thorough tax planning as well.
• Tax rules change constantly – stay on top of new opportunities to save tax.
Complete a Draw Ballot!
• Draw for four books at the end of this 30 minute presentation
• Draw ballots available at front of room
• Drop in basket at front of room• Only completely filled out ballots will
be winners.
Thank You.
Kurt Rosentreter,Senior Financial Advisor & Certified Financial Planner
CA, CFP, CLU, TEP,FMA, FCSI, CIMA, CIMManulife Securities Incorporated; Manulife Securities
Insurance Inc., Suite 1410-5001 Yonge StreetPhone 416-628-5770 Ext 238
www.kurtismycfo.com Kurt’s books are available
in bookstores across Canada.
DisclaimersManulife Securities Incorporated is registered as an Investment Dealer, or its equivalent,
with the provincial securities commissions and as such our Advisors are entitled to sell mutual funds, stocks, bonds and other securities as permitted under our registration. They may also be able to provide other services or products to you through their own business. As a member of the Investment Industry Regulatory Organization of Canada ("IIROC"), Manulife Securities Incorporated is obligated to disclose to you that you may be dealing with companies other than Manulife Securities Incorporated when purchasing services or products from your Associate (remuneration to your Associate may also come from various sources depending on the services or products purchased). For example, your Associate may offer any one or more of the following through a separate business, which would not be the responsibility of Manulife Securities Incorporated: * Income Tax Preparation; * Insurance: Life, Accident, Sickness, Disability, General. Please be sure that you have a clear understanding of which company you are dealing with for each of your services and products. Your Associate would be happy to provide any clarification you require.
Insurance products and services are offered through Manulife Securities Insurance Inc. (a licensed life insurance agency and affiliate of Manulife Securities) by Manulife Securities Advisors licensed as life agents.
The opinions expressed are those of the author and may not necessarily reflect those of Manulife Securities Incorporated and/or Manulife Securities Insurance Inc.
Using borrowed money to finance the purchase of securities involves greater risk than a purchase using cash resources only. If you borrow money to purchase securities, your responsibility to repay the loan and pay interest as required by its terms remains the same even if the value of the securities purchased declines.