As promised, the new Liberal government has announced the change of the Tax Free Savings Account (TFSA) annual contribution limit back to $5,500 effective for 2016. The contribution limit will once again be indexed and increased to the nearest $500 when applicable.
There are no changes or retractions to the 2015 annual contribution limit of $10,000 so the overall life-time maximum contribution room for all Canadians aged 18 and over is still $41,000 for 2015 and will increase to $46,500 as of January 1, 2016.
Contact Financial Heights if you have any further questions about this or if you would like to make a contribution to your TFSA.read more
The weather is warming up, many are enjoying the outdoors, and for a lot of you this means leaving the city and heading out to the family cottage.
While you can most likely think of many great memories of spending time at the cottage during the summer, you may not have given much thought to what would happen to the cottage after you are gone.
If you built, purchased, or inherited your cottage many years ago; chances are the value has significantly gone up. In general terms, half of this increase in value becomes taxable in the year the property is disposed of, either by sale or death. An estate plan can help you deal with and minimize these capital gains taxes.
A proper plan should look at who will inherit the cottage, if anyone, and how the expenses will be taken care of. The expenses may include the estimated capital gains tax, any obligations under a buy-sell agreement between surviving children to purchase the cottage from each other, and cash to provide estate equalization for children who won’t recieve ownership of the cottage.
The best way to start this planning process is by speaking with your family before deciding who gets the cottage in the will. You should then seek advice from professionals such as your financial advisor, lawyer and/or accountant to help you deal with the legal, tax, and technical aspects of the plan.
For more information on this topic or any other financial issues, please contact your advisor at Financial Heights Inc.read more