10/09/2020
Tax Savings withHigh cash surrender value:
Immediate Financing Arrangements (IFA) let investors capitalize heavily on an insurance contract by paying premiums that exceed the insurance cost. “The IFA is a strategy involving a life insurance policy with high cash surrender value. Holders can offer the policy as collateral for a bank loan.
In a marketing document, the insurer explains that customers purchase a policy in which they deposit sufficient funds to accumulate major cash surrender value. They then use the policy as collateral for a line of credit at a bank. Customers can invest the amounts borrowed in a company or in an income-producing asset.
The immediate financing arrangement offers tax advantages. “Transactions are generally structured such that interest and a portion of the premium are deductible in income calculation. The loan need not be repaid until death. The dividend account will be credited for the death benefit (portion of the death benefit that exceeds the adjusted cost base of the policy), and the company will have access to the insured capital that exceeds the loan balance
10/09/2020
Tax Saving Strategy with High cash surrender value:
Immediate Financing Arrangements (IFA) let investors capitalize heavily on an insurance contract by paying premiums that exceed the insurance cost. “The IFA is a strategy involving a life insurance policy with high cash surrender value. Holders can offer the policy as collateral for a bank loan.
In a marketing document, the insurer explains that customers purchase a policy in which they deposit sufficient funds to accumulate major cash surrender value. They then use the policy as collateral for a line of credit at a bank. Customers can invest the amounts borrowed in a company or in an income-producing asset.
The immediate financing arrangement offers tax advantages. Transactions are generally structured such that interest and a portion of the premium are deductible in income calculation. The loan need not be repaid until death. The dividend account will be credited for the death benefit (portion of the death benefit that exceeds the adjusted cost base of the policy), and the company will have access to the insured capital that exceeds the loan balance..
09/18/2020
Fact Everyone should know about Life Insurance:
There are different types of life insurance, and different ways to make it work for you. It’s not only to protect your family. It can also be part of your financial plan, so you may be able to access money in your policy while you’re alive.
Life insurance provides whomever you choose with a one-time, tax-free payment when you die, as long as you continue to pay your premiums.
09/07/2020
What is Tax Planning? Let's discuss three D's of tax planning: Deduct, Defer and Divide. We need to understand three D's to take advantage of effective tax planning.
Deduct: Deduction will reduce your taxes by an equal amount to your marginal tax rate. Most of people are familiar with RRSP but there are other deductions such as Moving Expenses, Child Care Expenses, Professional fee, Employment expenses and Interest expenses etc.
Defer: Defer strategies allows you to push having to pay tax now into future years. Basically, defer strategy puts the control of when you have to pay the tax in the hands to tax payer instead of CRA. RRSPS, RESPS and various investment income strategies are the common strategies.
Divide: Divide strategies often called income splitting. For example, if you have 1 person with $100,000 income vs. 2 people (husband and wife) paying taxes on $50,000 each. There are strategies to divide income with in the rules of CRA. Spousal RRSP, Splitting CPP, Pension Splitting, investing non-RRSP in lower income family members, use of partnership or corporation to earn business income and utilizing either inter-vivo or testamentary trusts.
I will be posting more strategies stay connected. Let me know should you want me to cover any particular topics.
09/06/2020
What is estate planning? A Will is The tip of the Iceberg in Estate Settlement. Believe it or not, you have an estate. Your estate is everything you own even you car, house, bank balances, personal possessions, your real estate, life insurance, boat, and even your furniture list is long...Estate planning is making a plan in advance and ensuring your wishes are carried out, and you want this to happen with the least amount paid in taxes, legal fees, probate and court fees. Being organized creates peace of mind and better financial results.
09/05/2020
Minimize the taxes on your income, Stay connected I will be posting my videos to discuss the options so you don't Pay more tax than necessary.
