Graham Westmacott CFA

Portfolio Manager

Susan Daley CFA

Associate Portfolio Manager
  • T519.880.0888
  • 1.877.517.0888
  • F519.880.9997
  • The Marsland Centre
  • 20 Erb St. W,
    Suite 506
  • Waterloo, Ontario N2L 1T2

The Taxation of Investment Returns

December 6, 2017 - 0 comments

When investing your money for the long-term, it is important to focus on things you can control. One of the items you can control is the amount of tax you pay on your investments. I outline how TFSA and RRSP accounts are taxed in their respective videos: What is a TFSA? and Rethinking Registered Retirement Savings Plans (RRSP’s). In today’s video I outline how investments are taxed personally, when you can no longer use these tax sheltered accounts. Investment returns are taxed based on the source of income. For a refresher on the sources of investment returns within a portfolio, check out my videos: Investing in Bonds: How Do I Make Money Buying Bonds? and Investing in Stocks: Earning a Return on Equities. In summary, interest and foreign dividends are taxed at your marginal tax rate, Canadian dividends are based on a gross-up and tax credit mechanism, and capital gains are taxed at half your marginal rate. Check out my video below to dive deeper into the mechanics of how this all works.


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