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A great investment strategy takes advantage of tax-free opportunities

A little bit of certainty goes a long way when it comes to your investments.

But that’s hard to come by, particularly when the economy is in a state of flux. Interest rates, inflation, and an uncertain real estate market are all causing anxiety among investors.

As well, the increased capital gains inclusion rate makes good tax planning even more important. Especially for those who are planning to pass down a cottage property to their children.

“The recent budget has a massive impact on generational cottages,” explains Chris Karram, founder of SafeBridge Private Wealth. “The tax on that ‘gift’ will now increase by 33 percent. That could mean $1 million-plus in new tax for some families.”

Chris and his team of experienced professionals find custom solutions for each of their clients, crafting balanced portfolios using a variety of assets. Safebridge implements tax-efficient wealth-building strategies to minimize their clients’ tax liabilities.

This could mean exploring tax-advantaged investment vehicles, optimizing your business structure, or leveraging powerful tools like life insurance to create tax-free wealth. A life insurance umbrella can provide incredible coverage and opportunity.

“A tax-exempt, cash value life insurance policy is one of only three tax-free assets available in Canada, which means proper planning and structuring is essential for keeping more of your own wealth,” explains Chris. “The other assets are your home and your tax-free savings account (TFSA), but each of those have volatility and restrictions tied to them.”

Property is a solid long-term strategy, but it can be volatile, and liquidity is a big challenge. TFSAs only offer a small opportunity for high-net-worth individuals and families due to their maximum contribution limits.

A well-managed life insurance umbrella, on the other hand, can function like a supersized TFSA that isn’t exposed to market uncertainty and doesn’t have maximum contribution limits. A bonus is the ability to use either personal or corporate funds to purchase life insurance.

“With life insurance, you can grow your money tax-free, you can access your money tax-free, and you can do so without slowing down the compounding growth and future impact of those funds as well,” says Chris. 

It can also be a huge benefit for estate planning, as funds invested in a life insurance policy allow families to take money out of their family corporation, holding company, or business completely tax free and put it in the hands of their children.

“It can completely eliminate dividend tax when succession occurs,” explains Chris. “So, they’re growing and protecting their money within the life insurance plan, and then passing it on to the next generation tax free.”

Once you’ve started to build your wealth, you want to protect it and see it grow. The professionals at SafeBridge Private Wealth can help make that happen.

TEXT CHRIS OCCHIUZZI
PHOTOS ANDREW FEARMAN

www.SafebridgePW.com

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