La Cible, magazine officiel de l’IQPF, est destinée aux planificateurs financiers et leur permet d’obtenir des unités de formation continue (UFC). Chaque numéro aborde une étude de cas touchant les différents domaines de la planification financière.
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25 FEATURE ARTICLE added to the preferred shares and equities if there is enough space in the RRSP. Tax optimization Step 1 – Allocate the after-tax assets into the accounts based on order of priority With four accounts and five asset classes (excluding cash), there are 2,880 possible combinations. One of the possible combinations is to use the order of Table 4 Table 3 Table 5 Year 0 NET AMOUNT (BEGIN) Allocation after income taxes RRSP TFSA NR HOLDING Total Cash $2,335 $5,000 $5,000 $2,599 $14,934 5% Fixed-income securities $44,356 $60,179 - - $104,535 35% Preferred shares - $14,934 - - $14,934 5% Cdn. equities - $19,888 $24,913 - $44,801 15% US equities - - $70,087 $34,448 $104,535 35% Int. equities - - - $14,934 $14,934 5% Total $46,690 $100,000 $100,000 $51,980 $298,670 100% Year 0 GROSS AMOUNT (BEGIN) Allocation before income taxes RRSP TFSA NR HOLDING Total Cash $5,000 $5,000 $5,000 $5,000 $20,000 5.00% Fixed-income securities $15,000 $60,179 - - $60,179 38.79% Preferred shares - $14,934 - - $14,934 3.73% Cdn. equities - $19,888 $24,913 - $44,801 11.20% US equities - - $70,087 $66,271 $136,358 34.09% Int. equities - - - $28,729 $28,729 7.18% Total $100,000 $100,000 $100,000 $100,000 $400,000 100.00% Projection Assumption Guidelines Weighting Expectations Return Cash 5% 2.40% 0.12% Fixed-income securities 35% 2.90% 1.02% Preferred shares 5% 2.90% 0.15% Cdn. equities 15% 6.10% 0.92% US equities 35% 6.40% 2.24% Int. equities 5% 7.10% 0.36% Return before fees 4.79% 4.79% Fees 1.00% 1.00% Return after fees 3.79% 3.79% Rounded 3.80% 3.80% asset classes and the accounts from the last table. In this case, after taxes, we will have the investment allocation in the various accounts outlined in Table 4 below. In this case, the space available in the RRSP is insufficient to hold all the fixed-income securities. This means we have to look at the next account on the list, the TFSA. After placing the fixed-income securities, we have to move to the next entry on the list of asset classes, preferred shares. And we continue in this way until all the asset classes and all the accounts have been considered. Step 2 – Reconvert the amounts of assets in the accounts to before-tax amounts In this step we reconvert the net amounts (after tax) into gross amounts to determine the actual amounts to invest. Using the same example, we get the numbers in Table 5 below.) We can see that the allocation of gross amounts to invest does not match the investor profile at all. This is because the net amounts in the RRSP and holding accounts have to be grossed up based on the tax rates to get the gross amounts. For example, since we made it a priority to put the fixed-income securities in the RRSP, we grossed up the amount of the investment to the gross amount ($44,356/ (1–53.31%) = $95,000). The same principle is used for the US and international equities held in the holding account.