News Feed Item

BMO Nesbitt Burns Tax Study: Only Half of Canadians Regularly Seek Out Tax Efficient Options When Making Investment Decisions

- Almost 60 per cent of Canadians are unsure how capital gains and dividend income are taxed

TORONTO, ONTARIO -- (Marketwired) -- 04/16/14 -- As the deadline to file income tax returns approaches, BMO Nesbitt Burns today issued a study which found that only half (51 per cent) of Canadians regularly seek out tax-smart options when considering new investments.

The study also found that a majority of Canadians say they are lacking knowledge about the tax treatment of certain types of investment income that can reduce their overall tax liability:

--  Fifty-nine per cent are unsure how capital gains are taxed.
--  Similarly, 59 per cent are uncertain how dividend income is treated from
    a tax perspective.

"One of the reasons why people don't seek out tax efficient investing solutions may very well be because many don't fully understand how investments are taxed," said John Waters, Vice-President, Head of Tax & Estate Planning, BMO Nesbitt Burns. "Being aware of how investments are affected by taxes is the first step to being tax smart with your portfolio, and can be crucial in maximizing your overall return."

Mr. Waters noted that an Investment Advisor can play a critical role in helping clients understand the tax implications when investing and working with clients to determine investment solutions that best fit their specific needs and goals.

BMO Investments Inc. offers a variety of tax smart investing options, including BMO SelectClass® Portfolios - a series of four risk differentiated portfolios constructed within a corporate class structure which allow investors to accumulate capital in a tax-efficient manner, through tax-deferred growth potential and tax-efficient monthly cash flow.

Do charitable donations influence Canadians' tax decisions?

The study also found that the majority (54 per cent) of respondents stated that tax credits offered on charitable donations do not have much (or any) influence on their decision to give.

"The tax system is designed to encourage Canadians to donate and support charitable causes, so there's definitely an incentive for people to consider factoring giving into their yearly budget," said Mr. Waters. "Donating to charity provides not only the opportunity to do good, but can also reduce your income tax bill and put a little money back into your pocket."

Mr. Waters added that donations can be claimed in the tax year they were made or carried forward for up to five years. To optimize tax savings, spouses can pool their charitable donations. Additionally, incentives like the "First-Time Donor's Super Credit" (FTDSC), which is available until 2017, encourages Canadians to support charities by giving new donors an extra, one-time 25 per cent federal tax credit for cash donations up to a maximum of $1,000. For example, under the FTDSC, with a donation of $500 the federal tax savings to you would be $242, which is in addition to the savings from your provincial donation tax credit.

Regional Breakdown:

Region                                                      % who stated the
                                                                  tax credit
            % who regularly                                       offered on
               seek out tax   % who are not    % who are not      charitable
                  efficient  very or at all   very or at all  donations does
                 investment   knowledgeable    knowledgeable   not influence
               options when       about how        about how  much or at all
          considering a new   capital gains  dividend income  their decision
                 investment       are taxed         is taxed       to donate
National                 51              59               59              54
Atlantic                 38              72               69              55
Quebec                   59              66               56              54
Ontario                  50              55               58              53
Prairies                 51              63               65              54
Alberta                  51              52               57              48
B.C.                     45              53               59              61

The survey was conducted by Pollara between March 14th and March 17th, 2014 with an online sample of 1,007 Canadians. The margin of error for a probability sample of this size is +/- 3.1%, 19 times out of 20. Data has been weighted by region, age and gender, based on the most recent Census figures, so that it is representative of adult Canadians.

For more information on tax efficient investing and planning, please visit www.bmo.com/nesbittburns.

For more information on wealth management news at BMO please visit http://www.linkedin.com/company/bmo-wealth-management-services-canada?trk=top_nav_home.

Get the latest BMO press releases via Twitter by following @BMOmedia.

Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. There are risks involved with investing with mutual funds. Please refer to the simplified prospectus for a complete description of risks.

® Registered trade-mark of Bank of Montreal, used under licence.

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
By now most people have either created their configuration management solution or are just embarking on this journey. In his session at @DevOpsSummit at 19th Cloud Expo, Marco Ceppi, a DevOps Engineer working at Canonical, will discuss how to take configuration management to the next level with modelling and orchestration. He will also discuss how and why people are moving from a machine-centric view to a service/application-oriented view of deployments, and how you can leverage the knowledge a...
@ThingsExpo has been named the Top 5 Most Influential M2M Brand by Onalytica in the ‘Machine to Machine: Top 100 Influencers and Brands.' Onalytica analyzed the online debate on M2M by looking at over 85,000 tweets to provide the most influential individuals and brands that drive the discussion. According to Onalytica the "analysis showed a very engaged community with a lot of interactive tweets. The M2M discussion seems to be more fragmented and driven by some of the major brands present in the...
In the 21st century, security on the Internet has become one of the most important issues. We hear more and more about cyber-attacks on the websites of large corporations, banks and even small businesses. When online we’re concerned not only for our own safety but also our privacy. We have to know that hackers usually start their preparation by investigating the private information of admins – the habits, interests, visited websites and so on. On the other hand, our own security is in danger bec...
Enterprises have been using both Big Data and virtualization for years. Until recently, however, most enterprises have not combined the two. Big Data's demands for higher levels of performance, the ability to control quality-of-service (QoS), and the ability to adhere to SLAs have kept it on bare metal, apart from the modern data center cloud. With recent technology innovations, we've seen the advantages of bare metal erode to such a degree that the enhanced flexibility and reduced costs that cl...
Fact: storage performance problems have only gotten more complicated, as applications not only have become largely virtualized, but also have moved to cloud-based infrastructures. Storage performance in virtualized environments isn’t just about IOPS anymore. Instead, you need to guarantee performance for individual VMs, helping applications maintain performance as the number of VMs continues to go up in real time. In his session at Cloud Expo, Dhiraj Sehgal, Product and Marketing at Tintri, wil...
As software becomes more and more complex, we, as software developers, have been splitting up our code into smaller and smaller components. This is also true for the environment in which we run our code: going from bare metal, to VMs to the modern-day Cloud Native world of containers, schedulers and microservices. While we have figured out how to run containerized applications in the cloud using schedulers, we've yet to come up with a good solution to bridge the gap between getting your conta...
19th Cloud Expo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterpri...
Amazon has gradually rolled out parts of its IoT offerings, but these are just the tip of the iceberg. In addition to optimizing their backend AWS offerings, Amazon is laying the ground work to be a major force in IoT - especially in the connected home and office. In his session at @ThingsExpo, Chris Kocher, founder and managing director of Grey Heron, explained how Amazon is extending its reach to become a major force in IoT by building on its dominant cloud IoT platform, its Dash Button strat...
You have great SaaS business app ideas. You want to turn your idea quickly into a functional and engaging proof of concept. You need to be able to modify it to meet customers' needs, and you need to deliver a complete and secure SaaS application. How could you achieve all the above and yet avoid unforeseen IT requirements that add unnecessary cost and complexity? You also want your app to be responsive in any device at any time. In his session at 19th Cloud Expo, Mark Allen, General Manager of...
SYS-CON Events announced today that Streamlyzer will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Streamlyzer is a powerful analytics for video streaming service that enables video streaming providers to monitor and analyze QoE (Quality-of-Experience) from end-user devices in real time.
Without lifecycle traceability and visibility across the tool chain, stakeholders from Planning-to-Ops have limited insight and answers to who, what, when, why and how across the DevOps lifecycle. This impacts the ability to deliver high quality software at the needed velocity to drive positive business outcomes. In his general session at @DevOpsSummit at 19th Cloud Expo, Eric Robertson, General Manager at CollabNet, will discuss how customers are able to achieve a level of transparency that e...
Cloud based infrastructure deployment is becoming more and more appealing to customers, from Fortune 500 companies to SMEs due to its pay-as-you-go model. Enterprise storage vendors are able to reach out to these customers by integrating in cloud based deployments; this needs adaptability and interoperability of the products confirming to cloud standards such as OpenStack, CloudStack, or Azure. As compared to off the shelf commodity storage, enterprise storages by its reliability, high-availabil...
The IoT industry is now at a crossroads, between the fast-paced innovation of technologies and the pending mass adoption by global enterprises. The complexity of combining rapidly evolving technologies and the need to establish practices for market acceleration pose a strong challenge to global enterprises as well as IoT vendors. In his session at @ThingsExpo, Clark Smith, senior product manager for Numerex, will discuss how Numerex, as an experienced, established IoT provider, has embraced a ...
DevOps theory promotes a culture of continuous improvement built on collaboration, empowerment, systems thinking, and feedback loops. But how do you collaborate effectively across the traditional silos? How can you make decisions without system-wide visibility? How can you see the whole system when it is spread across teams and locations? How do you close feedback loops across teams and activities delivering complex multi-tier, cloud, container, serverless, and/or API-based services?
Today every business relies on software to drive the innovation necessary for a competitive edge in the Application Economy. This is why collaboration between development and operations, or DevOps, has become IT’s number one priority. Whether you are in Dev or Ops, understanding how to implement a DevOps strategy can deliver faster development cycles, improved software quality, reduced deployment times and overall better experiences for your customers.