You may be wondering if you would be better off to form a corporation
to hold your investments, rather than holding them personally.
Unfortunately, this is not a simple question to answer, because every
person's situation differs, depending upon the amount they have to invest,
and the province in which they live.
Advantages:
for shareholders with a high marginal tax rate, a
portion of tax on dividends from taxable Canadian corporations may be
deferred until dividends are paid by the holding company to the
shareholder.
you may be able to locate the corporation in a province with a lower
corporate tax rate
probably not worthwhile unless investments are
substantial
Holding your investments inside a corporation will not
necessarily allow you to write off additional expenses. The only
expenses that are deductible by a corporation are those expenses incurred
in order to produce income.
See also our article Should
you incorporate? for more advantages and disadvantages of corporations
in general.
Tax tip: This is
complicated. Get advice from a qualified professional.
The information on this site is not intended to be a
substitute for professional advice. Each person's situation differs, and
a professional advisor can assist you in using the information on this web
site to your best advantage.
See our Business
Directory for tax, accounting and finance-related firms in your
area.
Please see our legal
disclaimer.
