Posts Tagged “taxation”
When an insurance audit is done as part of a mandate given by a policy owner, we find that in 99% of the cases that the policy has been mismanaged. In this particular case, such mismanagement cost the client more than $90,000. Why is this? The reason is simple and it is because financial…
Before answering this question, I should ask first whether you know that there are two types of marginal tax rates in Canada. There is the “POSTED” marginal tax rate which is what is used by the financial industry and what is shown on tax sites such as TAXTIPS http://www.taxtips.ca/marginaltaxrates.htm. But these marginal tax rates…
Learn more about the Universal Life Scam: http://www.amazon.ca/Unraveling-Universal-Life-Richard-Proteau/dp/1503246167 In 1966, the Carter Report made a series of recommendations in overhauling the Income Tax Act including changes to the taxation of life insurance. The main recommendation pertaining life insurance policies was: “3) In general, investment income accumulated for the benefit of the policy holder…
This text has been move to our new blog on Financial Services Consumer Aliance Proposed changes to prescribed annuity taxation are hidden in the proposals for changes in the exemption test of life policies. The proposal in regards to annuity taxation would modify Subsection 300(2) of the Income Tax Regulations. Under current regulations, the taxable income…
Before we can analyze the impact the change to the endowment age will have on the Exempt Test of a permanent life insurance, we first have to understand what the Exempt Test is. The easiest way to understand the Exempt Test is to illustrate this test as a piece of programming code. In Java, the…
I have said last year that the past is catching up with the insurance industry and that this industry must clean up its act. Before we discuss the implications of the new concept of a tax avoidance policy, it is necessary to understand why such a provision was deemed to be necessary. There are two…
For example, is the income earned within a Universal Life policy not subject to accrual taxation? If we based our answer on what we read in newspapers and in marketing brochures from insurers and firms, the answer is quite obvious. Insurance is exempt from accrual taxation: Globe and Mail on April 15, 2011: “One is…
In Quebec, advisors are now starting to understand the concept around the difference between efficient marginal tax rates and simple marginal tax rates with the publication of the Laferriere/Chartrand tax curves that are now freely available on the site of the CQFF. http://www.cqff.com/claude_laferriere/accueil_courbe.htm Most advisors and financial planners only consider efficient taxation at…
