The tax-filing deadline is April 30. So you still have time to
take advantage of a variety of lesser-known credits, deductions,
and transfers that the Canada Revenue Agency doesn't exactly
advertise with ringing bells and flashing lights. Here are five of
my favorites of particular interest to higher-bracket taxpayers and
1. The Equivalent-to-Spouse Tax Credit
This tax credit could add up to at least a $1,500 tax saving,
once you take federal and provincial taxes into account. You may be
able to claim it if:
You are divorced of legally separated (not supported by your
spouse), and you support a child under 18 in your home.
You are a single parent with a child under 18 living with
You are single and support a brother or sister under 18 living
You support an elderly parent who has moved in with you.
To claim the credit, you must be either unmarried or legally
divorced, maintain and live in your own residence, and have a
qualifying dependant who lives with you and is wholly dependent on
you for support during the year (the dependant may live away while
2. Transferring dividends to your spouse
If your spouse has little or no income except for taxable
dividends from Canadian companies, you may be able to reduce the
family tax bill by including your spouse's dividends in your
While that may seem totally counterintuitive, doing so will help
reduce your tax if your spouse can't make full use of the
Dividend Tax Credit. However, you may do this only if the transfer
of dividends increases the claim you make for your spouse as a
dependant. Moreover, if you do decide to transfer dividends, you
have to include all of your spouse's dividend income from
These strategies can be effective in the right circumstances.
But everyone's tax situation differs in the particulars. The
best way to determine whether a transfer would work for you is to
consult a qualified tax specialist.
3. Claim reserves for capital gains
If you have sold assets in 2014 and realized a capital gain, in
some cases you may be able to claim a capital gains reserve to
defer recognition of that capital gain for tax purposes.
You can claim a reserve if you sell a property but do not
receive all of the proceeds right away. An example of this would be
selling appreciated shares and taking back a promissory note as
Under the reserve rules, you need only recognize one fifth of
the gain in the current and each later year (cumulatively), so that
the entire capital gain will be accounted for by the fourth year
after the year of sale. If you are not able to claim a reserve
because you received all of the proceeds immediately on the sale,
look to see if you have a capital loss carryforward balance from
previous years that can offset your capital gain.
4. Objection expenses
If you tangled with the CRA in 2014, find bills or invoices from
your tax and legal advisors. You can deduct legal fees paid for
advice to object to (or appeal) an assessment under the Income Tax
Act, the Unemployment Insurance Act, the Canada Pension Plan or the
Quebec Pension Plan, plus any related accounting fees (net of any
award or reimbursements for such expenses).
As always, with any tax strategy that involves more complex
financial, investment, or commercial arrangements, I advise getting
professional legal tax advice in advance.
5. Claim foreign tax credits
You may be able to claim these if you have received investment
from a foreign source. File Form T2209. If your federal foreign tax
credit is restricted owing to certain tax rules, you may be able to
claim a provincial credit by filing Form T2036. If you still
can't claim the full credit, the excess foreign tax credit may
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Another self styled educator with the Paradigm Education Group tax protester movement has been sentenced to a jail term for tax evasion and counselling others to evade as a result of a successful tax prosecution.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).