Tax Strategies

The 2024 Federal Budget Review was prepared by our in-house BMO Private Wealth tax professionals: John Waters, Vice-President, Director of Tax Consulting Services and Dante Rossi, Director, Tax Planning.

A common incentive program provided by Canadian employers is a stock option plan. These programs grant employees (including directors) the right to acquire a set number of shares of the employer (or parent) company at a fixed price (“exercise price”) within a set timeframe. The intention of these programs is to align employee/employer interests by providing a long-term incentive in which employees benefit from the success of their employer, and likewise, employers benefit from long-term, loyal employees. This publication provides an overview of the Canadian tax implications of stock options issued to employees who are resident in Canada for tax purposes.

Since Canada represents only a small portion of the world’s capitalization, it may make sense to include some foreign investments in your portfolio. However, it is important to understand Canadian and other foreign tax implications of owning investments outside of Canada.

Knowing how tax rules affect your investments is essential to maximizing your after-tax return. In addition, keeping up to date on changes to the tax rules ensures that you take advantage of all the tax savings available to Canadian-resident individuals. This article provides an overview of select strategies to assist you in reducing your tax bill.

Although Canadian snowbirds reside in the U.S. for only a part of the year, there is the potential of being considered a U.S. resident and, in turn, having to pay U.S. income tax on the same basis as a permanent U.S. resident. This article outlines how the U.S. government determines whether you are a resident for income tax purposes; namely, it covers the criteria for meeting the Substantial Presence Test, Closer Connection Exception and the Canada U.S. Income Tax Treaty Tie-Breaker Rules.