Welcome Canadian Expats!

Introduction

At Bassem Fawzy Wealth Management, we understand that transitioning from life in Canada to becoming a global expat comes with unique financial and tax planning challenges. Whether you've recently moved to the UAE or have been here for years, we’re here to guide you through every step of your financial journey.

Navigating Your Tax Obligations as a Canadian Expat

Leaving Canada doesn’t mean leaving behind your financial responsibilities. From understanding non-resident tax status to exiting the Canadian tax system, it’s crucial to have a comprehensive plan in place to ensure compliance and financial security.

That’s where our strategic tax partner, 360 Global Tax, comes in.

Together, we provide tailored solutions that address the complexities of tax residency, cross-border compliance, and long-term wealth management.

Taxation of Investment Income

Interest Income

Interest income is fully taxable at your marginal tax rate. However, there are tax-efficient investment vehicles like the Tax-Free Savings Account (TFSA) where interest income earned is tax-free.

Dividend Income

Dividends from Canadian corporations are given preferential tax treatment through the Dividend Tax Credit. This credit aims to reduce double taxation and can significantly lower your payable tax.

Capital Gains

Only 50% of capital gains are included in your income for tax purposes, making them a tax-efficient form of investment income.

Tax Planning Strategies

Use Registered Accounts

Utilize registered accounts like RRSPs and TFSAs to shelter your investment income from taxes.

Hold Investments Efficiently

Hold tax-inefficient investments like interest-bearing assets in registered accounts and tax-efficient investments like Canadian equities in non-registered accounts.

Consider Income Splitting

If applicable, consider income splitting strategies with a lower-income spouse or family member to reduce the overall family tax burden.

CONCLUSION

Investment income tax planning is a critical aspect of wealth management. By understanding how different types of investment income are taxed and employing effective tax planning strategies, you can maximize your after-tax investment returns.

Remember, it’s always advisable to consult with a financial advisor or tax professional when dealing with complex matters like investment income tax planning.