Login l Contact l Help     





TOP GIC RATES

Click here
to get a list of the top GIC rates available through GP Wealth Management. Please contact your GP advisor for more information regarding any of the above investments.

  Open an account and request
GP Information Kits and
Applications. Learn more...
 


GET ON-LINE ACCESS
  To obtain access to your accounts, click here or contact us at 1-800-608-7707 ext. 242 or by email at  password@gpwealth.ca  



TOP FUNDS




Find out which funds are currently performing well. Click the links below for each category.
Canadian Focused Equity »
Canadian Fixed Income »
Global Equity »
 

Taxes and Your Investments

The only real number that matters in investing is what you make after the Canada Revenue Agency takes its share. This is known as your after-tax rate of return. A fixed-income investment paying 7% sounds good, but consider your after-tax return. If you were in the top income-tax bracket of around 50 per cent, you would take home only about 3.5%, which is quite a difference (assuming the investment is outside of your RRSP).

What is more, the amount of tax you pay varies with the type of investment and how you arrange your portfolio. These factors can have a great impact on your after-tax return. (Note that you don't have to pay any tax on gains earned by money in a tax-sheltered account such as an RRSP or a RRIF until you make a withdrawal.)

The most heavily taxed types of investments are those such as GICs and CSBs that earn you interest income. Stocks, real estate and other investments that entail more risk but have the potential for higher returns in the form of capital gains are taxed less. Dividends from Canadian corporations have the lowest effective tax rate.

After-tax return of $1,000.00 investment


 

 

Description Interest Dividends
(Gross-up)
Capital Gains
Taxable Amount $1,000.00 $1,380.00 $500.00
Basic Tax (41%) $410.00 $565.80 $205.00
Dividend Tax Credit N/A ($207.00) N/A
Net Tax $410.00 $358.00 $205.00
Net After-Tax Income $590.00 $642.00 $795.00


Learn about Tax-Efficent Investing
Related Information
Tax Changes
Download  Documents
For more information on all topics related to personal finance, visit our Learning Centre
Learn more
 
The Value of Advice Getting Advice
Canadians with financial advisors are more confident about their future.

Learn more, download the independent report on
The Value of Advice
Reviewing your income tax strategy? We encourage you to talk to us. Click here if you would like to discuss your tax plan or receive helpful information by mail. Not a GP client yet? Find out more about:
Download Report Open an Account