January 2011

As we embark on a new year, people tend to turn their attention to planning for the future. While we believe that tax planning should be an integral part of the overall wealth planning process, we also recognize that the beginning of the year is generally a good time to review your tax strategies and identify those strategies that may be implemented in the upcoming year.

We recommend that you review your family’s particular situation regularly to ensure that you have structured your financial affairs to minimize taxes. There are a number of steps that you can take now to ensure optimal tax planning throughout the year. We recommend that you consult with your advisors in helping you to coordinate and implement these strategies as not all of our suggestions may be appropriate for your particular situation.


What’s new and updates for 2010

Income tax rates

  • Corporate income tax rates – Federal general tax rates decreasing 19% - 2010, 16.5% - 2011 & 15% - 2012; small business rate remains at 11%
  • Eligible dividends – marginal tax rates effectively increasing as a result of decreasing corporate income tax rates.
Employee stock options
  • Effective March 4, 2010
    • only the employer or employee (not both) can claim a tax deduction for cashed-out stock options; and
    •  $100,000 tax deferral eliminated.

 Harmonized Sales Tax (HST)

  • Effective July 1, 2010
    • HST replaced the GST and provincial sales tax in B.C. and Ontario; and
    • HST rate in Nova Scotia increased from 13% to 15%.

Canada Pension Plan (CPP)

  • Changes have been made to CPP that will be phased in gradually between 2011 and 2016. The first major change is effective January 2011:
  • If you apply for CPP after age 65, your monthly CPP retirement pension amount will increase by a larger percentage (gradually from 2011 to 2013).
  • You will not be affected by these changes if you started receiving a CPP retirement pension before December 31, 2010, and you remain out of the work force.
  • The changes do not apply to the Quebec Pension Plan (QPP)

Depending on your particular situation, you may want to consider strategies that address the following:

  • Choosing the optimal salary/dividend mix from your private company
  • Ensuring tax-efficient corporate withdrawals
  • Incorporating professional income
  • Selling your business in a tax-efficient manner
  • Income splitting with low income family members
  • Tax efficient investing
  • Maximize the efficiency of retirement savings plans


To receive our complimentary publication “2010-2011 Tax Planning Checklist” outlining these and more tax and estate planning strategies that may be used in conjunction with any recommendations and advice provided by your professional investment, legal and tax advisors, please contact your Richardson GMP Investment Advisor.






Previous Tax & Estate Planning Strategies
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  • Critical Illness Insurance

    Nov 01, 2011

    Critical Illness isn’t something any of us like to think about, but unfortunately it happens. Despite our progressive healthcare system, we still are faced with increased waiting periods and out of pocket expenses for additional equipment and alternative treatments...
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  • The tax benefits of flow-through share investing

    Oct 01, 2011

    Investing in flow-through shares has been a popular tax reduction strategy for several years in Canada. Flow-through shares allow the issuing company to renounce or “flow through” tax expenses associated with Canadian explora­tion activities to investors...
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  • Modular Benefit Plans

    Sep 01, 2011

    While the cost of group insurance continues to rise, employers are ready to accept reasonable cost increases in order to maintain competitive compensation packages that will help them attract and retain the best employees...
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  • Registered Education Savings Plan

    Aug 01, 2011

    With the ever increasing cost of post secondary education, the tax-deferred growth of a Registered Education Savings Plan (RESP) and the Canada Education Savings Grant (CESG) are attractive ways to plan for this major life event...
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  • Estate bond

    Jul 01, 2011

    Life Insurance can be used as an effective way of accumulating and transferring wealth. An Estate Bond is a financial planning strategy that transfers non registered savings from a tax exposed investment to an exempt life insurance policy...
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  • Cottage succession

    Jun 01, 2011

    For most of us, there are wonderful memories attached to a family cottage. However, at some point, cottage owners will face the financial and emotional challenges of selling or transferring this cherished family asset...
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  • Insured Annuities

    May 01, 2011

    An Insured Annuity provides a guaranteed, tax preferred income stream for as long as you live...
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  • Changes to the Canada Pension Plan and Quebec Pension Plan

    Apr 01, 2011

    The Canada Pension Plan (CPP) has recently implemented changes to benefits that will be phased in gradually over a six year period beginning in January 2011. If you have not already applied for CPP retirement pension benefits...
    read more
  • Tax planning checklist

    Jan 01, 2011

    As we embark on a new year, people tend to turn their attention to planning for the future. While we believe that tax planning should be an integral part of the overall wealth planning...
    read more