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How can I reduce my taxes in Canada?

Have you ever asked yourself, “How can I reduce my taxes in Canada?” We all want to know how to save money, especially close to April 30th, the due date for personal tax returns in Canada.

This article explains how to reduce income taxes, by applying the 10 best tax tips for individuals:

reducing your taxes in Canada can be difficult.read on to learn how.

1. First time donor super credit

A major change to the 2013 tax budget was the addition of the First-Time Donor Super Credit. This new super credit is only available between the years of 2013-2017, replacing the existing non-refundable charitable donation tax credit.

A first time donor will be allowed to deduct 40% of donations $200 and under and 54% for donations over $200 without exceeding the maximum of $1000. To qualify as a first time donor, you or your spouse must not have claimed the charitable donation tax credit in any of the previous 5 tax years.

For more information visit the CRA website to see how this super credit can reduce your taxes.

2. Child care expenses

Child care expenses include, but are not limited to, fees paid to a babysitter or nanny, daycare fees, costs for an after school program, PLASP fees, etc. They are deductible by the lower income spouse, even if the higher income spouse paid for the child care costs.

The maximum amount of child care expenses that can be claimed is $7,000 for each child Born in 2003  or later and $4,000 for each child born in 1993 to 2002.

3. Accounting fees

You can minimize your taxes in Canada, by deducting fees paid to your accountant for preparing your individual income tax return. The accounting fees paid may be deducted from investment income, rental income, or business income reported on your tax return.

In all other cases, accounting fees are non-deductible.

4. Salespersons expenses

As a salesperson, you can deduct any reasonable expense that you incurred for the purpose of earning commission income.

To support your expense deductions, you must complete form T2200, Declaration of Conditions of Employment, and be required to pay for expenses related to your sales activities, as a condition of your employment.

5. Car expenses

Deducting car expenses is another answer to “How can I decrease my Canadian taxes?”

If you are required to use your personal car to carry out your employment duties, you can deduct expenses related to your car or vehicle. However, you must have a completed form T2200, Declaration of Conditions of Employment, and be required by your employment contract to use your personal automobile.

Only the business use portion of your car expenses can be deducted on your personal income tax return, which includes:

  • Insurance
  • Repairs and maintenance
  • Lease costs (to a maximum of $800 + taxes)
  • Capital cost allowance (i.e. tax depreciation, at a rate of 30% per year)
  • 407 charges
  • Parking fees

For information on whether it’s better to lease or buy a car for tax reasons, see Toronto Accountant Discusses Leasing vs. Buying Car

6. RRSP – “How can I lower my taxes in Canada?”

Contributions made to an RRSP are deductible from your income. The maximum amount that you can contribute to an RRSP for 2013 is $23,820.

The 2013 RRSP contribution limit is calculated as follows: (18% x 2012 earned income, plus any unused RRSP contribution room from prior years).

Any income earned inside an RRSP is tax free. However withdrawals from an RRSP are taxable to you.

If you’d like to know whether a TFSA or RRSP is better for you, see TFSA vs RRSP – Chartered Accountant Toronto Discusses Pros and Cons

7. TFSA

How can I reduce my taxes in Canada? Well, consider contributing to a tax free savings account (TFSA). A TFSA is an account in which any investment income earned is not subject to income tax. Unlike an RRSP, withdrawals from a TFSA are not taxable.

Stocks, bonds, mutual funds, and high interest savings accounts can all be held inside a TFSA.

In addition, the maximum annual contribution limit to a TFSA is $5,500(2013).

Note that contributions made to a TFSA are non-deductible.

For further information on TFSA’s, see the Canada Revenue Agency’s website and also read TFSA vs RRSP – Chartered Accountant Toronto Discusses Pros and Cons

8. Spousal loan

Another way to lessen your tax bill is by making a loan to your spouse at the Canada Revenue Agency’s prescribed rate of interest, which currently is 2% but expected to decrease to 1% January 1, 2014.

Your spouse could invest the loan proceeds in a business, high interest bearing investments, stocks, real estate, etc., and any income generated from those investments would be included in your spouse’s taxable income.

The optimal amount of a spousal loan is equal to the amount that would equalize you and your spouse’s taxable incomes, after taking into account the investment income expected to be generated on the investments made from the loan proceeds.

Making a spousal loan to a spouse who is in a lower income tax bracket is an excellent income splitting strategy, and is a perfect answer to your question of “How can I take advantage of tax credits in Canada?”

9. Children’s Fitness Amount

The children’s fitness tax credit, a.k.a. children’s fitness amount, is a tax credit available to Canadian taxpayers who enrol their children in a physical activity program.

The tax credit is calculated as 15% of the amount paid for a physical activity program. The maximum credit that can be claimed is $500 if your child is under 16.

The receipt for your child’s physical activity program should say whether the program qualifies for the children’s fitness tax credit.

10. Public transit amount

As a Canadian taxpayer, you can claim a tax credit, known as the public transit tax credit, for amounts spent on monthly or yearly public transit passes. Eligible passes must be for one of the following:

  • Busses
  • Streetcars
  • Subways
  • Trains
  • Ferries

11. Frequently Asked Questions on “How can I reduce my taxes in Canada?”

A) Question: Can I claim parking fees on my tax return?

Yes, you can claim parking fees on your tax return, under certain circumstances, including:

  • You are self employed and earned business income
  • You are an employee and paid for parking to visit a client, supplier, or in connection with your employment duties. Amounts paid for parking at your place of work are non deductible.
  • You earned rental income during the year and were required to pay for parking in connection with your real estate activities

B) Question: Can I deduct interest paid on a loan to purchase stocks or other income producing investments?

Yes, you can deduct interest paid on a loan to purchase stocks or other income producing investments. The interest paid should be deducted on Schedule 4 of your personal tax return.

For more information on tax efficient investing, please see How Do I Save Tax in Canada by Accountants in Oakville

C) Question: Can RRSP contributions reduce my income tax bracket?

Yes, RRSP contributions can reduce your income tax bracket. The amount of RRSP contributions that you must make in order to reduce your income tax bracket is equal to: Your taxable income before RRSP’s minus the threshold for the next lowest tax bracket.

To find out what the threshold is for each income tax bracket, see What are the income tax rates in Canada for 2013?

D) Question: Which employment expenses can I deduct to reduce my employment income for tax purposes?

There are many employment expenses that you can deduct, as an employee, on your personal income tax return, including:

  • Travel expenses (hotels, air fare and meals)
  • Car expenses
  • Office rent
  • Union and professional dues
  • Home office expenses
  • Cost of supplies (includes cell phone air time and long distance charges)
  • Salary paid to an assistant

For more information on deducting employment expenses, see How Do I Save Tax in Canada by Accountants in Oakville?

E) Question: I’m self-employed. How do I reduce my income taxes in Canada?

If you are self employed in Canada, there are many ways to reduce your income taxes in Canada, especially through tax write-off’s. For more information on reducing tax for self employed individuals, see How to save taxes for self employed in Canada?

F) Question: Are there ways to reduce corporate taxes in Canada?

Yes, there are many ways to reduce corporate taxes in Canada. For the best ways to reduce corporate taxes, watch my video How to save corporate taxes in Canada. Also, read my article 10 Best Tax Tips for Business Owners

About the Author – Allan Madan

Allan Madan is a CPA, CA and the founder of Madan Chartered Accountant Professional Corporation. Allan provides valuable tax planning, accounting and income tax preparation services in the Greater Toronto Area.

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How can I reduce my taxes in Canada? was last modified: September 17th, 2014 by superAmin
This entry was posted in Personal tax and tagged , . Bookmark the permalink.

About the author

is a Chartered Accountant, CPA and Tax Expert and enjoys working with business owners, individuals and entrepreneurs.

58 Responses to How can I reduce my taxes in Canada?

  1. Gordon Unger says:

    Can you further explain how the spousal loan works? I am the higher income earner but howe does providing a loan to my spouse reduce my taxes?

    • superAmin says:

      A spousal loan can be summarized in 4 easy steps:

      1. Lend money to your lower-income spouse
      2. Your spouse uses the borrowed money to make an investment that is profitable
      3. The profits from the investment are taxed in your spouse’s hands, not yours
      4. Your spouse pays interest to you on the borrowed money at a rate of 1% per year

      In summary, a spousal loan allows you to splint income from investments with your spouse, with the goal of reducing your family’s income tax

  2. Alex says:

    If I would like to contribute $5000 to my TFSA, do I need to wait for certain period before I invest to the stock or other similar investment. Also, how to take those money to invest? Do I need to open another investment accounting?

    • superAmin says:

      There’s no minimum time period that you have to wait to invest. The TFSA that you opened with your financial institution should allow for trading of stocks, bonds, etc., if that is your intention.

  3. Len says:

    Hi
    I am self employed. Is there a way to get EI in case I run out of clients ?

    Thanks

    • superAmin says:

      It is very important that to point out that self-employed contractors are NOT eligible for general EI benefits. If you are unemployed, you will not receive EI.

      If you were fully self-employed (had no insurable earnings coming in from a job) during the year, there is a “Special EI Contribution” Program for which you are eligible::

      -Firstly, you must have registered for EI and waited at least 12 months before making a claim
      -Secondly, in the prior year (2011), your self-employed earnings should have been at least $6,222 (minimum)
      -Lastly, claims can ONLY be made on sickness (must provide proof and medical certificate); maternity
      (must provide proof/certificate); gravely ill family member (must provide medical proof/certificate)

      You will be always required to provide proof to make claims.

    • superAmin says:

      It is very important that to point out that self-employed contractors are NOT eligible for general EI benefits. If you are unemployed, you will not receive EI.

      If you were fully self-employed (had no insurable earnings coming in from a job) during the year, there is a “Special EI Contribution” Program for which you are eligible::

      -Firstly, you must have registered for EI and waited at least 12 months before making a claim
      -Secondly, in the prior year (2011), your self-employed earnings should have been at least $6,222 (minimum)
      -Lastly, claims can ONLY be made on sickness (must provide proof and medical certificate); maternity
      (must provide proof/certificate); gravely ill family member (must provide medical proof/certificate)

      You will be always required to provide proof to make claims.

  4. Chad says:

    Canadian Tax Accounting Blog!

  5. Mark says:

    I was just wondering with respect to child expenses can we deduct any amount for physical activity. We have the boys in hockey right now.

    Thanks

  6. Mary says:

    Hi I was just wondering if I wanted to transfer my RRSPs to a TFSA could I do that and are there any tax consequences as a result?

    • superAmin says:

      Unfortunately Mary it makes little sense to do this. For two reasons one You can only contribute $5500 to your TFSA each year. The second reason is even if you transfer to a TFSA the withdrawal is not tax free. You will still be required to pay taxes on the withdrawal. You are best to keep the money in the RRSP or just withdraw normally and pay the according taxes.

  7. Bo says:

    I am moving residences this coming year. I am moving from Toronto to Calgary. I am driving myself and getting a truck to take my belongings. I was just wondering if there is any deduction the government gives us if we are moving long distances?

  8. J.J. says:

    Hi Allan,

    Is it possible to deduct healthcare expenses not covered by the Ontario Health Insurance Plan?

  9. Lyle says:

    What if I made a loan to who is now an ex-wife, but was legally my wife when I gave her the loan. Would the same rate of interest still apply?

    • superAmin says:

      Hi Lyle,

      Since she was legally your wife at the time of the loan, the same rate would still apply to her.

      Best Regards,

      Allan Madan and Team

  10. Mahmoud says:

    What is the total TFSA contribution room?

    • superAmin says:

      Hi Mahmoud,

      IF you were at least 18 years of age in 2009 when the TFSA was first establish then your total contribution room for 2014 would be $31,000.

      Best regards,

      Allan Madan and Team

  11. Timothy says:

    Can I make TFSA contributions as a non-resident?

    • superAmin says:

      Hi Timothy,

      Any contributions that you make as a non-resident will be subject to a 1% tax for each month the contribution remains in the account. So it would be pointless to contribute even though
      you technically could.

      Best Regards,

      Allan Madan and Team

  12. Steve says:

    Great page. Thank you for the advice.

    As an inside sales person who makes a salary and untaxed commissions, am I best served to match the amount of my commissions into an rsp to avoid taxes? Any downside to this?

    Thanks again!

    • superAmin says:

      Hi Steve,

      Yes, you should certainly consider making matching RRSP contributions up to your RRSP limit for the year. This will provide you with some tax relief because RRSP contributions are tax deductible.

      You should also ask your employer to complete form T2200, Declaration of Conditions of Employment. By completing this form, you may be able to claim important tax deductions such as:

      - home office
      - meals and entertainment
      - telephone and internet
      - car expenses
      - purchases you made for the purpose of earning commissions

      Thanks,

      Allan Madan, CPA, CA
      Tel: 905-268-0150

  13. Rosie says:

    I am placed in a very high tax bracket because I receive annuity payments monthly. Currently I receive over $2,900 per month and pay taxes in quarterly installments. I do work full-time as well, and have never lived on disability and/or welfare (even though I am physically disabled due to a doctor’s extreme poor judgement before I was born.) The annuity increases my taxes astronomically and I am struggling to pay taxes because of this.

    For example my quarterly installments in 2013 were $7119. Most of my monthly annuity amounts given to me go directly to pay for taxes. Other than investing in RRSP, and donations is there another way to reduce my taxes? (To make donations to help with the following year taxes I would be paying less towards the current year’s taxes, which doesn’t seem to make sense to me..)

    I cannot afford a lawyer and accountant to look into this. I live on very little income just to pay my taxes so there’s no much left with lawyer or accountant fees.

    Thank you,
    Rosie

    • superAmin says:

      Hi Rosie,

      You can consider the following tax savings tips to reduce your taxes:

      1. Claim the disability tax credit if you are eligible
      2. Claim medical expenses paid, including medical expenses related to your disability
      3. If you are single, claim the ‘equivalent to spouse’ tax credit. If married, claim the spousal tax credit
      4. Explore other tax credits you may qualify for: 1) First Time Donor’s Super Tax Credit, 2) Tax Credit for Dependent Children, 3) Public Transit Passes Credit
      5. If you are an avid investor, you can purchase ‘flow though shares’, which have very attractive tax attributes (speak to a financial adviser first)

      Thank You,

      Allan Madan, CPA, CA
      Tel: 905-268-0150

  14. Junaid says:

    Hello Just wondering, whatever my employer contributed to my RSP, could that be used for my tax benefits? Cos I got my RSP tax slip and it doesn’t shows my employer contribution.. Only mine.. Thanks

    • superAmin says:

      Hi Junaid,

      RRSP contributions made by your employer (at their own expense) are treated as a taxable benefit to you. The taxable benefit is reported on box 14 and box 40 of your T4 slip. If you have sufficient RRSP contribution room available, you can make a deduction for the amount your employer contributed to your RRSP.

      Thanks,

      Allan Madan, CPA, CA
      Tel: 905-268-0150

  15. Kay says:

    Dear Allan,
    Currently I am employed. I would like to borrow some money around $20,000 from my brother who is in US and employed. What would be the safe mode to transfer this amount in order document for taxation purpose. This money is for my house hold support only. Is it exempted from the tax?

    • superAmin says:

      Hi Kay,

      Loans received by residents of Canada are not subject to Canadian income taxes. A loan agreement should be prepared specifying the terms of the loan, including the interest rate applicable, and repayment period. Ordinarily, interest paid to a non resident of Canada would be subject to Canadian withholding taxes. However, pursuant to the Canada US Tax Treaty, the withholding tax rate has been reduced to 0% on interest payments.

      Thanks,

      Allan Madan, CPA, CA
      Tel: 905-268-0150

  16. laura says:

    Instead of health/dental insurance, I have a Personal Spending Account at work, where I can get reimbursed for child care expenses. The reimbursement that I receive is taxable. Can I still claim my child care expenses on my income tax?

    • superAmin says:

      Hi Laura,

      So long as the monies reimbursed to you for child care are included in your T4 slip as a taxable benefit, you can deduct the amount you paid to a child care provider on your personal tax return. You must ensure that the child care expenses paid are qualifying expenses for the purposes of the child care tax deduction.

      Thanks,

      Allan Madan, CPA, CA
      Tel: 905-268-0150

  17. rs says:

    If I have 2 kids, and I spent $1000 on sports for one, and $100 for sports on the other. Can I split the amounts and apply $400 from the one and apply it to the other one where I only spent $100?
    thanks

  18. Max Aleris says:

    I am planning to take a sabbatical to France in a couple of years and am wondering about any tax benefits. Are there any? If so, how do I ensure that my leave of absence is acceptable to the CRA?

    • amadan says:

      Hello Max

      A leave of absence allows you to defer tax on up to one-third of your income for a full six years, and it works this way. You set aside up to one-third of your salary each year for up to six years. Your sabbatical must begin no later than six years after the deferral begins, and it must be at least six months in length. If you are intending to attend an educational institution full-time, it must be three months. You’ll have to return to your workplace for at least as long as you leave, and you’ll have to pay tax on the deferred income no later than the seventh year weather you took the leave or not.

      To be accepted by the CRA, you must get your employer to document your plan in writing. Also, deferred money has to be used to fund a leave of absence and not a savings plan.

      Regards,
      Allan Madan

  19. Delshad Alinejad says:

    Hello Allan. Coming off of a harsh winter, I am looking to buy a cottage to spend my summers. I am self-employed, and will use the cottage to entertain clients. Are there any other considerations that I might be able to claim for a deduction?

    • amadan says:

      Hello.
      As your second home, your cottage will not be covered by the principal residence exemption so you may have to pay capital gains when you sell it. If you are doing any renovations, make sure you keep all receipts. You may be able to use these expenses to reduce the gain. As you are self-employed, there are several other things that may apply to you.
      If you head straight from your meeting to a cottage, make sure you track your miles as these may eligible for a deduction. However, you can only claim the portion related to business. If you have alcohol in your fridge, you may be able to claim 50% of it as an entertainment expense but only if you are using it to entertain clients. Finally, if you happen to receive a bad sunburn, you may be able to claim any prescriptions you receive as treatment.

      Regards,
      Allan Madan and Team

  20. Gregory says:

    Hi Allan, I’m thinking of moving to a new city to be closer to work. What are the tax rules when it comes to moving? Is there a minimum distance I have to move from my current home?

    • amadan says:

      Hello. The In terms of distance, your new home has to be at minimum 40 kilometres from your current one. This is calculated by taking the shortest normal route of travel. When calculating, your new income determines your deduction limits. If you can’t claim all your costs because your new income is too low, you can carry them forward to a new year. Here are some of the costs you can deduct:

      • Travelling costs, including meals and lodging
      • Costs related to moving and storing your household items
      • Costs that you incur when cancelling a lease
      • Expenses related to selling your old home, including real estate commissions
      • Legal costs on a new home purchases
      • Land transfer tax on the new home
      • Costs of maintaining a vacant former resident
      • Costs relating to changing documents to reflect your new address, replacing driver’s licenses, auto permits, and utility connections and disconnections.

      You should plan your move so that your new home is within the 40-kilometer range. If you’re a student, you should note that research grants count as income in your new-location.

      Regards,
      Allan Madan and Team

  21. Dean Martin says:

    Hi Allan,

    I’m a priest of a church in Alliston, Ontario. My house is provided by my church. Am I eligible for any deductions? If the utilities of the home were included with my income, can I submit these for a deduction? What form do I fill out?

    • amadan says:

      Hello.

      When you’re a member of the clergy, your clergy residence deduction is reduced to the least of the following two amounts:

      A) Either one-third of your total payment from the office or employment or $10,000, whichever is greater.
      B) The fair rental value of the residence (reduced by other amounts deducted in connection with that residence.

      You are also now required to file a prescribed form with your income tax return that will be signed by your employer. This is to verify that you meet the requirements of a clergy member. As your employer provides you with a residence, you can deduct all amounts that were included with your income with respect to that accommodation (including utilities). However, the deductions you claim cannot exceed your income for that year.

      The form that you are looking for is the T1223, and you can find it here: http://www.cra-arc.gc.ca/E/pbg/tf/t1223/t1223-13e.pdf.

      Regards,
      Allan Madan and Team

  22. Zoey Hall says:

    Hey Allan, If I give my husband money to pay for his TFSA, do I have to structure it a spousal loan? If I do it this way, he would have to pay me interest and I would have to report it. I called the CRA, but the agent I spoke to wasn’t very familiar with TFSA’s. He told me that I want a definite answer, I have to write the Income Tax Rulings Directorate. Do you have any advice for me?

    • superAmin says:

      Hello.

      Normally, the attribution rules in the Income Tax Act block attempts at splitting income or capital gains between spouses or partners. It does this by attributing such income or gains back to the original spouse or partner. However, there is a special exception to these rules regarding gifts. These regulations state that the rules will not apply to any income or gains earned in a TFSA derived from a gift in which the holder contributes to their own TFSA.

      Therefore, a gift is not a loan. You are free to give funds to your spouse for a TFSA without any adverse tax consequences. Here, the only thing you have to worry about is over contribution. For more information, please visit https://www.woodgundy.cibc.com/wg/pdf/tax-planning-with-tfsa.pdf

      Regards,
      Allan Madan and Team

  23. Keith West says:

    Hello Allan.
    Several times a month, my daughter travels from Toronto to McMaster University in Hamilton. She uses the Presto Card to take the GO Train. Also, my wife sometimes uses a different pass to travel around the city to do errands. Could they qualify for some sort of credit? If they do, how is the credit calculated?

    • superAmin says:

      Hello,

      I believe that your daughter and wife could qualify for the Public Transit Amount. This is a non-refundable credit, designed to encourage people to take public transit. It can help you lower your tax payable, but cannot result in a refund. Here is what your daughter and wife would need to qualify:

      Presto is a pay-per-use system. Provided their Presto cards are registered, there is a minimum usage that your daughter and wife must meet. They need to have taken at 32 one-way trips within any 31 day period. The credit is calculated by taking the total cost of the passes, and multiplying it by the lowest tax rate (15%). You can get a yearly transaction usage report on this page: https://www.prestocard.ca/CustomerManagement/TransitUsageReport.
      For more information, please visit https://www.prestocard.ca/en-us/pages/contentpages/faq.aspx.

      Regards,
      Allan Madan and Team

  24. Raharjo Purnama says:

    Hey Allan.

    Currently, I am saving to buy a house. I have a full-time job already, but I’m thinking of getting a second one to bring in more money. This would be 16 hours a week to my 40 hours of my full-time job. All of my friends tell me it is a bad idea, because I would be paying a larger amount of tax. I’m thinking of buying a tax software to sort out my situation.

    Should I take on the second job, from a tax perspective?

    • superAmin says:

      Hello Raharjo,

      Having a second job may put you in a higher tax bracket, which would raise your marginal tax rate. Both employers will continue to deduct taxes from your paycheques as if you only had one job. Therefore, you will end up with more take home pay, but you may have to pay extra taxes when you file your tax return. At the same time, it might result in lower payroll taxes if you are close to the cut-off point.

      The first thing to do is calculate the gross take home you would be earning. For 2014, the second federal tax bracket is taxed at 22%. It starts at $43,562. If a second job pushes you over the first bracket ($43,561), your marginal tax rate goes up. If you do take the second job, be sure to accurately report your other income. If you don’t your other employer may withhold too much tax, CPP, and EI.

      Regards,
      Allan Madan and Team

  25. petemck says:

    Just wondering about claiming parking on my tax return. You said you would be able to claim parking expenses on your taxes if it was in connection with your employment duties. You also said that amounts paid for parking at your place of work are non-deductible. Wouldn’t employment duties mean doing work, at your place of work? Or does the term “employment duties” mean only if you are travelling anywhere away from your place of work?

    I only ask this because I am currently interning at a radio station and they don’t offer much parking (it’s in a downtown of a major city) so the only parking is paid parking near the building. This is fine since the parking is relatively cheap, but it does add up. I was wondering, since I’m not getting paid for this work but still have to pay for parking, would I be able to claim it on my taxes?

    • amadan says:

      No the Income Tax Act specifically excludes cost of commuting (including parking at your place of work) as part of eligible parking expense that is deductible against your employment income.

      Similar argument could be made by those who use public transit to commute if they can deduct those expenses as employment expense since they need to commute to work – which the answer is no.

      Furthermore, any employment expense is deductible only against your employment income. Therefore, if you have no employment income, you would not be able to deduct eligible parking expenses anyways.

  26. Anniet says:

    Hey Allan,
    i am in the highest income bracket . Can you please explain how the spousal loan works again? if i want to do this, how do i go about it. Can i lend my spouse money for his education, will that count as a spousal loan? Thank you

    • superAmin says:

      Hi Anniet,

      Hello, spousal loan works if you are in a significantly higher tax bracket than your spouse. In this instance, you can lend the money to your spouse at the CRA’s prescribed rate (currently it’s at 1%) and your spouse can use this money to earn investment income. Since it will be your spouse earning the investment income, the tax rate applied on such income will be his marginal tax rate.

      You can do this by creating a promissory note between yourself and your spouse. I highly recommend that you run this strategy by a professional before proceeding however since terms and conditions apply.

      If your spouse will use the money for non-investing purpose (eg. For education), then you don’t need a spousal loan. You can simply give the money to him or pay for his education yourself. No tax implication.

  27. Chaturika says:

    Dear Team,

    I am planning to move to Canada on PR from a South Asian Country., I have secured a Job In BC. However, I am concerned about the taxation on interest on my savings in my Home country. Do I have to pay tax on my worldly income such as interest from savings? is yes, How do I reduce or stop paying tax on the above mentioned income.

    Rgds

    Chaturika

    • amadan says:

      Hi Chaturika,

      If you become a resident of Canada, you will be subject to Canadian tax on your worldwide income, including foreign interest income. However, you will be able to claim a foreign tax credit in Canada for any taxes paid on foreign income to avoid double taxation.

      Best Regards,

  28. Ricardo Maraneta says:

    Hi Alan,

    When my father visited us in Vancouver he got sick and was hospitalized (no insurance) and I have to pay the hospital bills (a significant amount). I am making a monthly payment to the hospital even my father is already back in the U.S. Just wondering if I can file this to my tax return.

    Best Regards,
    Ricardo

  29. John says:

    Hi
    I am from the UK, but I rent a condo in Canada with my girlfriend and work offhsore in Brazil for over 7 months a year.

    I have gone Non resident from the UK so I just pay minimal tax contributions to the Brazil government,
    my question is at what stage will I have to pay tax in Canada (married/kids/buy a property). Also is there any exemptions due to me being out of the country for such large periods of time?

    • amadan says:

      Hi John,

      Sorry for the delayed response in our reply. You would not be considered a Canadian resident for tax purposes as long as you do not work here in Canada. Since you live/work outside of Canada for more than 183 days you would be considered a non-resident.

      If you were to get married then you would be considered to have an established home in Canada through your spouse. This would make you a resident of Canada for tax purposes and you would be taxed on your world wide income. If you live in Canada for more than 183 days during the year you will also be considered a resident for tax purposes and be taxed on world wide income. If you have any other questions please let me know.

      thanks

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