Capital Gains Class: Tax Efficient Annual Income
The objective of this class is to provide a first preference for annual capital gains dividends. Capital gains provide income at a low rate of taxation in comparison to other income types. Capital gains are also the only income type that can offset a capital loss that may have been realized previously.
Utilize Tax Losses
- Use distributed capital gains income to offset current or historical capital tax losses. Ideal for retirees from professional partnerships who have capital losses due to non-deductible expenses.
Tax Efficient Method of Earning Interest Income
- Investors can have underlying exposure to fixed income investments while only paying tax at preferred capital gains rates.
- Investors can use capital gains to split income with minor children, capital gains are the only income type not attributable back to parent, grandparent or other donor.
Minimizing OAS Clawbacks
- Ideal for retirees who wish to maintain withdrawals from registered accounts and/or minimize the impacts of investment income on OAS clawbacks.
Tax Minimization for High Income Earners
- For individuals in the top marginal tax bracket, capital gains attract the least amount of tax as compared to any other type of taxable investment income.