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When it comes to investment income, all is not equal after tax. Knowing how tax rules affect your investments is essential in order to maximize your after tax return. This publication explains the taxation of investment income held in a taxable account as it pertains to an individual resident in Canada.
How Investment Income is Taxed
Taxation of Investment Income (May 26,2016)
It’s important to revisit the taxation of investment income, especially given the changes in the taxation of dividend income over the last few years. Even the most tax-conscious investor may not appreciate how these changes can impact their after-tax returns. It’s also important to remember that there are different tax rates depending on the type of investment income received – including interest, dividends and capital gains – and they are not equal on an after-tax basis.
This report provides an overview on the taxation of eligible dividends, in light of recent changes.