Quarterly Newsletter

Investment Insight Spring 2024

Managing Your Wealth

Are you aware that up to 50% of your registered assets could be taxed upon death?
Registered Asset Preservation Plan
Meridian Program Features and Benefits
Meridian Program Features and Benefits
Meridian Program
Meridian Program
Architect Program Profile
Architect Program Profile
Quadrant Program
Quadrant Program
Blueprint Program - Best of BMO
Blueprint Program - Best of BMO

Tax Planning

Financial Planning Year-End Checklist
Financial Planning Year-End Checklist
The 2023 Tax Documents Overview and Schedule provides a summary of mailing dates and online availability (Gateway) of clients’ tax slips.
2023 Tax Documents Overview and Schedule
Tax Efficient Investing
Tax Efficient Investing
This report provides an overview on the taxation of eligible dividends, in light of recent changes.
Eligible Dividend Income
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
2023 Tax Tips for Investors
2023 Tax Tips for Investors
Towards the end of the year, many investors review their investment portfolios to determine the anticipated tax impact of any capital gains and losses realized during the year. For investors who have realized significant capital gains, this article examines various strategies to help reduce the impact of a potential tax liability of these gains, regardless of whether they were the result of a voluntary or involuntary sale.
Strategies to Minimize Capital Gains Tax
One of the most important tax breaks offered to Canadians is the “Principal Residence Exemption” which can reduce or eliminate any capital gain otherwise occurring for income tax purposes on the disposition (or deemed disposition, such as upon death) of your home. In general, a resident of Canada who owns only one housing unit, which is situated on land of one-half hectare or less, and which has been used since its acquisition strictly as their residence, will qualify for the principal residence exemption. Although simple in concept, in situations other than the one described above the tax rules governing the exemption can quickly become complicated, particularly when more than one residence is owned by a family unit.
A Guide to the Principal Residence Exemption
Understanding Capital Losses
Understanding Capital Losses
RRSPs - Making Your Money Work as Hard as You Do
RRSPs - Making Your Money Work as Hard as You Do
For 2022, small business owners can use the Capital Gains Deduction to shelter up to $913,630 of capital gains on the sale of shares of a qualifying small business corporation. Due to the potential tax savings from accessing this deduction, it represents one of the most compelling tax planning opportunities for Canadian small business owners. As the rules are complex, only a general discussion is provided here. As with all tax planning, professional advice is critical to understanding the specific implications in your situation.
Tax Planning for Small Business Owners
Reduce Your Taxes With a Prescribed Rate Loan
Reduce Your Taxes With a Prescribed Rate Loan
In recent years, many corporations have undergone corporate reorganizations to rationalize their business activities. These reorganizations are complex due to the corporate, securities and tax law requirements. This article reviews the income tax consequences for Canadian shareholders of a foreign corporation that distributes shares as part of a reorganization.
Tax Deferral for Foreign Spin-Offs
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.
Canadian Snowbirds and U.S. Income Tax
The pension income-splitting rules provide an effective, yet simple, strategy to lower family taxes. Being able to split pension income provides an opportunity for couples to reduce their overall family tax bill by taking advantage of a spouse’s or common law partner’s lower marginal tax rate where retirement incomes are disproportionate.
Pension Income-splitting Provides Tax Planning Opportunities for Couples
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.
The CRA’s Foreign Reporting Requirements
In late 2021, the Federal government announced that the simplified tax deduction for 2020 allowing employees to claim a flat rate for expenses incurred as a result of working from home due to COVID-19, (without the need to track detailed expenses), will be extended for 2021 and 2022.
Claiming Home Office Expenses on Your 2022 Personal Income Tax Return
In the 2022 Federal budget, the Canadian government proposed the introduction of the tax-free First Home Savings Account (“FHSA”). This new registered plan enables prospective first-time home buyers to contribute up to $40,000 toward saving for their first home on a tax-free basis. Similar to a Registered Retirement Savings Plan (“RRSP”), contributions to an FHSA are tax-deductible, and withdrawals to purchase a first home – including from investment income – are non-taxable, like a Tax-Free Savings Account (“TFSA”).
First Home Savings Account

Retirement Planning

Retirement Planning
Retirement Planning
Investing in a Registered Retirement Savings Plan (“RRSP”) is one of the soundest ways to ensure you enjoy a financially secure retirement. In order to maximize the benefits of an RRSP, it’s important to have a basic understanding of the rules that govern them.
Understanding the Basic RRSP Rules
A formalized savings plan that uses a registered plan, such as a Registered Retirement Savings Plan (RRSP), Tax-Free Savings Account (TFSA) or a Registered Retirement Income Fund (RRIF), is one of the soundest ways to realize your retirement goals. Here are some strategies you can use to maximize the benefits of your RRSP, TFSA and RRIF.
Strategies for Your Retirement Savings Plan
Maximizing Retirement Income
Maximizing Retirement Income
When the time for retirement arrives, payments from the Canada Pension Plan or Quebec Pension Plan (CPP/QPP), Registered Retirement Income Fund (RRIF), and Old Age Security (OAS) are the main sources of retirement income for many Canadians. It is important to consider these income streams and discuss the planning opportunities with your financial professional as you approach your retirement years. This publication provides an overview of these programs and some factors affecting the decision-making process.
Retirement planning: CPP/QPP, RRIF and OAS considerations
Consider Self-Employment In Retirement
Consider Self-Employment In Retirement
Arranging residential care for an aging friend or relative is often an uncertain process, especially when you are responsible for choosing a nursing home or retirement residence. The following questions may be useful to consider when visiting and evaluating a residence and can be used to assess and compare each option. Use a copy of this checklist at each of the residences you are visiting.
Residential care checklist
When someone becomes a caregiver, they can often be confused and overwhelmed by trying to find services to assist them in caring for their loved one. Many people do not know what services are available or where to begin to find these services. The good news is there are several options to assist you.
Caregiving in Canada
Things to consider: Remarrying during your retirement years can impact your family and financial situation in ways you may not have anticipated.
Remarriage in Retirement
The Tax-Free Savings Account (TFSA) is a savings plan that allows Canadians to invest and earn tax-free returns. Any income (interest, dividends, and capital gains) earned is tax-free.
Tax-Free Savings Account (TFSA)

Philanthropy

The benefits of making a charitable donation are countless – from helping those in need to the personal satisfaction of giving back to the causes that are important to us. Charitable giving also makes good sense from a tax perspective. With proper planning, you can reduce your total income tax liability and maximize the value of your donation.
Donating Appreciated Securities
Philanthropy is an important financial planning consideration for many Canadians, and an integral part of their wealth management plan. A Charitable Gift Fund (“donor advised fund”), established through the BMO Charitable Giving Program, allows you to create a flexible and customized philanthropic solution that will have a lasting impact on causes that matter to you and your family.
BMO Charitable Giving Program

Will and Estate Planning

Estate Planning
Estate Planning
Estate planning is an essential component of a successful wealth management program. A good estate plan will provide you with the peace of mind that comes from knowing your family will be taken care of, and your financial affairs will be in order and administered according to your wishes. An important key element of any estate plan is a Will.
Wills that Work
This is designed to help your family, executor (referred to as a “liquidator” in Quebec), or Power of Attorney for Property (referred to as a “mandatory” in Quebec) locate all of your important documents and other information needed to administer your estate or act as your Power of Attorney for Property
Estate Information Organizer
Estate Planning for Digital Assets
Estate Planning for Digital Assets
Estate Preservation and Distribution
Estate Preservation and Distribution
In Time of Loss
In Time of Loss
Estate Immediate Checklist
Estate Immediate Checklist
Transferring Your Wealth to Future Generations
Transferring Your Wealth to Future Generations
Protecting your lifestyle
Survivor Income Needs
Many Canadians enjoy spending time in the U.S., and at some point may consider the purchase of a U.S. vacation property. As a result, it is important for Canadians to fully understand U.S. reporting and tax issues related to their ownership of U.S. real property, in addition to any Canadian tax implications.
Canadian Ownership of U.S. Real Property
Cottage Planning
Cottage Planning
If you own a vacation property, this provides information on the tax consequences of selling a second home and highlights important estate planning considerations, if your plan is to keep your vacation property in the family for the next generation.
Planning for the Family Vacation Property
Let professionals help you with your duties as executor
Appointing a Corporate Executor
Perils of Appointing a Non-Resident Estate Trustee
Perils of Appointing a Non-Resident Estate Trustee
Joint Ownership Pros and Cons
Joint Ownership Pros and Cons
A Guide for Granting Powers of Attorney
A Guide for Granting Powers of Attorney
Incapacity Planning in a Mobile World
Incapacity Planning in a Mobile World

Education Planning

RESP's – Withdrawal Checklist
RESP's – Withdrawal Checklist
This article provides information on how, and when, to withdraw funds from an RESP, as well as information on qualifying educational institutions and programs. In situations where the RESP beneficiary decides not to pursue post-secondary studies or leaves before completing a qualifying program, the subscriber of the plan must decide what to do with the money that has accumulated in the RESP.
Taking Money Out Of An RESP

Business Advisory & Succession Planning

Shareholders' Agreement
Business Succession Planning Tool
Understanding Personal Holding Companies
Understanding Personal Holding Companies
Nearly two in five business owners are wondering who will take over their business and how they will transition it to a successor. However, the majority of them do not have a formal plan to exit their business or preserve the continuity of the business upon retirement. As small business owners shift gears and look to retirement, decisions about when and how to retire will have a significant impact on their personal financial situations and the future of their businesses.
Succession Planning Is Key For Small Business Owners
In the absence of planning, when an individual passes away owning shares of a private company, they could be exposed to double or triple taxation. Professional expertise is required to effectively execute and realize the available tax savings. For more information, speak with your BMO financial professional.
Holding Investments inside a Company – Taxes upon Death

Research

Rates Scenario, covering currencies and markets outside of the U.S. and Canada.
Rates Scenario

Economic and Market Updates

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.
2024 Federal Budget Review
Strategic commentary and an overview of financial markets.
Investment Strategy
The Global Equity Weekly provides timely analysis of major economic trends, and how they impact stocks and financial markets more broadly. The latest economic data, interest rate moves and earnings trends all drive the performance of your portfolio. In addition to analysis from the Economics team, this report offers a set of charts and tables to track market performance.
Global Equity Weekly
The Goods, BMO's monthly commodity price publication.
The Goods

Education and Knowledge

Critical Illness & Long Term Care Insurance
Critical Illness & Long Term Care Insurance
Homecare Services Checklist
Homecare Services Checklist
Dependent Care
Dependent Care
Financial Planning
Financial Planning