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Tax efficient investing for life <ul><li>Investors Group Corporate Class Inc. ™ </li></ul><ul><li>Allegro Corporate Class ...
This presentation is offered by <ul><li>Provided by Investors Group Financial Services Inc.,  a financial services firm.  ...
Investors Group Corporate Class Inc. TM   <ul><li>Efficient tax-planning </li></ul><ul><ul><li>Reducing your taxable incom...
1.  Efficient tax planning   The basics
Understanding Your Taxes <ul><li>How much will you pay? It depends on… </li></ul><ul><ul><li>your marginal tax rate. </li>...
Reducing your tax bill <ul><li>Conversions </li></ul><ul><ul><li>Convert assets into tax-efficient investments </li></ul><...
Limits placed on  registered investments… <ul><li>Registered retirement savings plan (RRSP) </li></ul><ul><ul><li>Annual c...
2.   Beyond registered investments   Investors Group Corporate Class Inc. TM Allegro Corporate Class Portfolios ™
Tax efficient investing  for life <ul><ul><li>Investors Group Corporate Class Inc. funds </li></ul></ul><ul><ul><ul><li>Ov...
<ul><li>Tax-efficient investing </li></ul><ul><ul><li>Avoid triggering tax liabilities when re-balancing your portfolio  <...
Who can benefit most from this strategy?  <ul><li>Investors who : </li></ul><ul><ul><li>Hold investments outside of regist...
Case study: David versus Susan  <ul><li>David and Susan have both maxed out their RRSP and TFSA investments and are search...
Case study: David versus Susan  <ul><li>The after-tax value of Susan’s Corporate Class investments is over  $60,000 greate...
3.  Generating cash flow   Return of capital
Tax efficient monthly payout <ul><li>Transfer your Series  A  and/or  B  portfolio and/or fund over to Series-T Allegro Co...
The complexities of multiple income sources <ul><li>Understanding your sources of income is critically important in order ...
“ Turn your tax problems into investment solutions” – C3224 – 05/2009 Tel. Office :     (514) 350-8750 poste 8815 Toll Fre...
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Your Tax-Advantaged Invesment Solution

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Your Tax-Advantaged Invesment Solution

  1. 1. Tax efficient investing for life <ul><li>Investors Group Corporate Class Inc. ™ </li></ul><ul><li>Allegro Corporate Class Portfolios ™ </li></ul>
  2. 2. This presentation is offered by <ul><li>Provided by Investors Group Financial Services Inc., a financial services firm. </li></ul><ul><li>Presented as a general source of information only, and is not intended as a solicitation to buy or sell investments, nor is it intended to provide professional advice including, without limitation, investment, financial, legal, accounting or tax advice. For more information on this topic or any other investment or financial matters, please contact me, Turenne Joseph, consultant at Investors Group. </li></ul><ul><li>The Investors Group Corporate Class™ mutual funds are shares issued by Investors Group Corporate Class Inc. </li></ul><ul><li>Commissions, fees and expenses may be associated with mutual fund investments. Read the prospectus before investing. Mutual funds are not guaranteed, values change frequently and past performance may not be repeated. </li></ul><ul><li>™ Trademark owned by IGM Financial Inc. and licensed to its subsidiary corporations. </li></ul>Turenne Joseph Financial Security Advisor , Mutual Funds Representative Licensed in Quebec, Ontario and British Columbia Investors Group Financial Services Inc. , a financial services firm [email_address]
  3. 3. Investors Group Corporate Class Inc. TM <ul><li>Efficient tax-planning </li></ul><ul><ul><li>Reducing your taxable income </li></ul></ul><ul><li>Beyond registered investments </li></ul><ul><ul><li>Our solution for you </li></ul></ul><ul><ul><ul><li>Investors Group Corporate Class Inc. TM </li></ul></ul></ul><ul><ul><ul><li>Allegro Corporate Class Portfolios TM </li></ul></ul></ul><ul><ul><li>Who can benefit? </li></ul></ul><ul><ul><li>A case-study: David vs. Susan </li></ul></ul><ul><li>Generating cash flow </li></ul><ul><ul><li>Allegro Corporate Class Portfolios TM - Series T </li></ul></ul><ul><ul><li>Return of Capital (ROC) </li></ul></ul><ul><ul><li>Coordinating multiple income sources </li></ul></ul>
  4. 4. 1. Efficient tax planning The basics
  5. 5. Understanding Your Taxes <ul><li>How much will you pay? It depends on… </li></ul><ul><ul><li>your marginal tax rate. </li></ul></ul><ul><ul><li>the type of investment income you receive. </li></ul></ul><ul><li>Tax treatment of $10,000 of income under varying types of taxation, assuming a combined marginal tax rate of 46.41%: </li></ul>Interest income Eligible Dividend income Capital Gains income RRSP/RRIF withdrawals Return of Capital Marginal tax rate 46.41% 23.10% 23.20% 46.41% 0.00% Income tax $4,641 $2,310 $2,320 $4,641 $0 You keep $5,359 $7,690 $7,680 $5,359 $10,000
  6. 6. Reducing your tax bill <ul><li>Conversions </li></ul><ul><ul><li>Convert assets into tax-efficient investments </li></ul></ul><ul><li>Deductions </li></ul><ul><ul><li>Use existing tax credits to reduce your overall taxable income </li></ul></ul><ul><li>Divide </li></ul><ul><ul><li>Transfer income to your spouse or children to reduce your overall family unit taxable income </li></ul></ul><ul><li>Deferral </li></ul><ul><ul><li>Choose investments that allow you to defer payment of taxes </li></ul></ul>
  7. 7. Limits placed on registered investments… <ul><li>Registered retirement savings plan (RRSP) </li></ul><ul><ul><li>Annual contribution limit of 18% of your previous year’s income to a maximum of $22,000 for 2010 </li></ul></ul><ul><ul><li>Contribution age limit set at 71 </li></ul></ul><ul><li>Tax-free savings account (TFSA) </li></ul><ul><ul><li>Annual contribution limit of $5,000 dollars per year regardless of past year’s income </li></ul></ul>What if these are not enough to meet your needs? Most common option is… <ul><li>Non-registered investments </li></ul><ul><ul><li>Problem : tax liability incurred every time rebalancing occurs </li></ul></ul>
  8. 8. 2. Beyond registered investments Investors Group Corporate Class Inc. TM Allegro Corporate Class Portfolios ™
  9. 9. Tax efficient investing for life <ul><ul><li>Investors Group Corporate Class Inc. funds </li></ul></ul><ul><ul><ul><li>Over forty Investors Group Corporate Class investments </li></ul></ul></ul><ul><ul><ul><li>Broad selection of cross sectors and geographic diversification </li></ul></ul></ul><ul><ul><ul><li>Fee-free switching between investments </li></ul></ul></ul><ul><ul><li>Allegro Corporate Class Inc. Portfolios </li></ul></ul><ul><ul><ul><li>Seven approaches to choose from </li></ul></ul></ul><ul><ul><ul><li>Broad selection of cross sectors and geographic diversification </li></ul></ul></ul><ul><ul><ul><li>Fee-free switching between portfolios </li></ul></ul></ul>
  10. 10. <ul><li>Tax-efficient investing </li></ul><ul><ul><li>Avoid triggering tax liabilities when re-balancing your portfolio </li></ul></ul><ul><ul><li>Allows your investments to grow on a tax deferred basis </li></ul></ul><ul><ul><li>Unique fixed income exposure options provide safety without immediate tax consequences </li></ul></ul><ul><li>Additional benefits </li></ul><ul><ul><li>No contribution limits </li></ul></ul><ul><ul><li>No age restrictions </li></ul></ul><ul><ul><li>No loss of contribution room as a result of early withdrawals </li></ul></ul><ul><ul><li>Limited impact on your income tested benefits </li></ul></ul>Corporate Class takes tax planning seriously
  11. 11. Who can benefit most from this strategy? <ul><li>Investors who : </li></ul><ul><ul><li>Hold investments outside of registered accounts, but have maxed out their RRSP and TFSA contributions </li></ul></ul><ul><ul><li>Would like the freedom of adjusting their portfolio regularly without realizing capital gains </li></ul></ul><ul><ul><li>Have a long-term investment time horizon </li></ul></ul>
  12. 12. Case study: David versus Susan <ul><li>David and Susan have both maxed out their RRSP and TFSA investments and are searching for alternatives. </li></ul><ul><ul><li>Susan opts to invest $100,000 in the Investors Group Corporate Class structure </li></ul></ul><ul><ul><li>David invests $100,000 in the same portfolio but in a traditional non-registered structure </li></ul></ul><ul><li>Let’s assume the following conditions apply </li></ul><ul><ul><li>Both have a 25 year investment time horizon </li></ul></ul><ul><ul><li>Both have a marginal tax rate of 39% for the period </li></ul></ul><ul><ul><li>The Corporation pays a 2% capital gain dividend each year </li></ul></ul><ul><ul><li>10% of the portfolio is rebalanced each year resulting in funds being sold and reinvested. </li></ul></ul>
  13. 13. Case study: David versus Susan <ul><li>The after-tax value of Susan’s Corporate Class investments is over $60,000 greater than David’s regular unit-trust portfolio. </li></ul><ul><li>60% of the portfolio consists of equity investments realizing an annual return of 8.5%. </li></ul><ul><li>• 40% of the portfolio consists of fixed income exposure investments earning a 3.5% return. </li></ul><ul><li>• The portfolio is rebalanced at each year end, resulting in 10% of the funds being sold and reinvested in other funds. </li></ul><ul><li>• The mutual fund trusts make annual distributions of their net investment income and capital gains distributions equal to 2% of net assets. </li></ul><ul><li>• A 39% marginal tax rate, an annual capital gain inclusion rate of 50% and the Corporation pays a 2% capital gain dividend each year. </li></ul><ul><li>• Investments are sold after 25 years. </li></ul><ul><li>• The mathematical table shown is used only to illustrate the effects of the compound growth rate and is not intended to reflect future values or returns on investment. </li></ul>Initial Investment After Tax Benefit of managing investment inside Corporate Class over 25 years $15,000 $9,284 $25,000 $15,473 $50,000 $30,947 $75,000 $46,420 $100,000 $61,894
  14. 14. 3. Generating cash flow Return of capital
  15. 15. Tax efficient monthly payout <ul><li>Transfer your Series A and/or B portfolio and/or fund over to Series-T Allegro Corporate Class Portfolios and save tax through the return-of-capital feature </li></ul>Series A or B Allegro Corporate Class Portfolios Series-T Allegro Corporate Class Portfolios Systematic withdrawal plan with return-of-capital Tax efficient monthly payout Series A or B Corporate Class funds Payout is a return of capital, which is your original investment and therefore not subject to tax
  16. 16. The complexities of multiple income sources <ul><li>Understanding your sources of income is critically important in order to coordinate them in the most tax efficient way: </li></ul><ul><li>Personal savings: </li></ul><ul><ul><li>RRSP/RRIF </li></ul></ul><ul><ul><li>TFSA </li></ul></ul><ul><ul><li>Non-registered investments </li></ul></ul><ul><ul><li>Etc… </li></ul></ul><ul><li>Government: </li></ul><ul><ul><li>CPP </li></ul></ul><ul><ul><li>QPP </li></ul></ul><ul><ul><li>OAS </li></ul></ul><ul><ul><li>Etc… </li></ul></ul><ul><li>Other: </li></ul><ul><ul><li>Part-time employment </li></ul></ul><ul><ul><li>Home equity </li></ul></ul><ul><ul><li>Etc… </li></ul></ul><ul><li>Employer sponsored: </li></ul><ul><ul><li>Employer pension plan </li></ul></ul><ul><ul><li>Group RSP </li></ul></ul><ul><ul><li>Deferred profit sharing </li></ul></ul>
  17. 17. “ Turn your tax problems into investment solutions” – C3224 – 05/2009 Tel. Office :    (514) 350-8750 poste 8815 Toll Free : 1 (866) 688-8750 Fax :   (514) 350-8752 Email :   [email_address]   Financial Security Advisor Mutual Funds Representative Licensed in Québec, Ontario and British Columbia Investors Group Financial Services, a financial services firm   2001 University, Suite 1620 Montréal  QC   H3A 2A6 You have questions? Maximize your possibilities and financial freedom … Turenne Joseph

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