Splitting Investment Income

There may be advantages to having investment income (such as income from term deposits and investment accounts) earned in the name of the low-income spouse. If you have taxable income in excess of $180,000 and your spouse has no income, you could save $8,463 on $18,200 investment income if it is invested in your partner’s name.

Alternatively, if you have significant wealth, you may wish to establish a discretionary investment trust for asset protection and tax planning purposes.  This strategy may allow you to cap the tax payable on investment income to a maximum of 30% with the use of a corporate beneficiary.  There are some restrictions that are applicable to this structure and it is not appropriate in all instances.

If you would like to discuss the best ownership structure for any upcoming investments, please contact us.