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February 22, 2018
10:48 am
Doug
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Saver-Mom said
Doug, don’t forget 100,000$ in each HT and HB in spouse’s name alone, for a total of 600,000$ per couple...as long as we are talking trust  

Good point, Saver-Mom. I didn't know how much he had to "play with" or tie up but absolutely correct. 🙂

Cheers,
Doug

February 22, 2018
10:49 am
Doug
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Loonie said
In order to be fully insured, you should only put about 96,000 into each of these pots. The interest is included in the 100K CDIC coverage, so you have to work backwards from there to see what your max deposit should be.

I agree; wouldn't touch any other kind of investment for 18 months. Need at least 10 years, preferably 20 or, better, 30. Further, 400K is not enough to interest TD Private Wealth Mgmt in your account - unless you have other assets to offer them; and, if it did, they would likely take 1% in management fees, with no guarantee of exceeding net 3% or even meeting it.  

Right, but the interest wouldn't be paid until maturity, or annually, as the case may be. So, until it's been paid, you could put $100,000 and withdraw the interest once it's been paid. 🙂

Cheers,
Doug

February 22, 2018
10:52 am
Doug
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gamgam said
Thankyou Saver-Mom, I was aware of how to achieve several CDIC limits. The reason I like to keep investments in my name alone is to pay less income tax. We have an accountant that seems to think a joint T5 slip has to be claimed 50/50. 50.4% tax vs. 37.9% tax? It all adds up!  

On the new thread, let's see if this thread "fizzles". If it doesn't exceed two pages (a few more posts), I recommend just letting it play itself out. 🙂

On the tax treatment, even investments in joint names can be declared 100% by the lower earning spouse. Accountant is mistaken. 🙂

Cheers,
Doug

February 22, 2018
10:55 am
Doug
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gamgam said
Thankyou Saver-Mom, I was aware of how to achieve several CDIC limits. The reason I like to keep investments in my name alone is to pay less income tax. We have an accountant that seems to think a joint T5 slip has to be claimed 50/50. 50.4% tax vs. 37.9% tax? It all adds up!

Thankyou Lonnie, I too do the calculation of including paid up interest into my CDIC limit. As far as TD Private Wealth Mgmt, we are at that level we are accepted (well over 1 mil) as we have our RRSP's with TD Waterhouse now. Management fees would be 1% but we are at 1.7% now. I also am hesitant on the next 18 months as far as the stock market goes. I think TINA is coming to an end!

Lastly thankyou Doug, We would be invested in a balanced fund as we are nearing retirement and would draw this out first as we do not have pensions. Hopefully to capture a 33.25% tax bracket. Have saved very well though! As far as T5 interest taxed as income in any Canadian province? Take a look at provincial combined taxes across the provinces and look at the difference! I would have no complaints claiming the province BC on my return! As soon as we are over $68K look out! Much worse $202K!

P.S. Should start a new thread as this has nothing to do with HSBC  

Each province has different provincial tax rates, yes, but it's based on where you reside, not where your investments are, unless I'm mistaken (and I don't think I am)?

As to Saver-Mom's comments about Alterna, they have Me-to-Me Transfers just like Tangerine and can even be linked electronically, I think. If not, the process is not onerous as I confirmed with their reps they accept e-Statements, either by fax or mail. 🙂

Cheers,
Doug

February 22, 2018
2:07 pm
Loonie
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At 4%, I think I would opt for compounding rather than annual payout, so would need to limit deposit to around $96,000. However, some people might choose to take the profits to pay the income tax. In any event, with annual interest payouts, you have to think about the accumulation during the preceding 11 months. I believe CDIC covers what is owed to date but perhaps BC insurance is different.

My understanding is that the interest must be declared by the person who contributed the funds, even in joint account. It's not a choice, like, say, medical expenses, as to who declares it.

I think that what Saver-Mom was concerned about with Alterna is the difficulty of transferring "large sums", as they have transfer limits.

February 22, 2018
7:18 pm
Saver-Mom
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Congrats on the planned home purchase Gamgam
Loonie, I too thought the interest on joint accounts must be declared by whomever deposited the money.
And yes, I was referring to Alterna having daily, weekly and monthly transfer out limits...

February 22, 2018
8:02 pm
Doug
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Loonie said
At 4%, I think I would opt for compounding rather than annual payout, so would need to limit deposit to around $96,000. However, some people might choose to take the profits to pay the income tax. In any event, with annual interest payouts, you have to think about the accumulation during the preceding 11 months. I believe CDIC covers what is owed to date but perhaps BC insurance is different.

My understanding is that the interest must be declared by the person who contributed the funds, even in joint account. It's not a choice, like, say, medical expenses, as to who declares it.

I think that what Saver-Mom was concerned about with Alterna is the difficulty of transferring "large sums", as they have transfer limits.  

Right, but gangnam was referring to the HSBC 18-month 2.88% or whatever GIC promo, though. However, in the CCS case, yes you're quite right. Still, even when Coast Capital compounds their interest, thankfully, they report it as a credit to the GIC term on the anniversary date each year so interest is reported annually for tax purposes.

It would be impossible for CRA to prove whose funds those were, though. 🙂

Cheers,
Doug

February 22, 2018
8:12 pm
Loonie
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I don't see why it would be impossible for CRA to know where the money came from. Can't they access bank records?

February 22, 2018
8:16 pm
Saver-Mom
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Especially if the spousal incomes are dissimilar and one spouse deposits into the joint account while the other declares the interest...is this not tax evasion?

February 23, 2018
11:32 am
Doug
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Loonie said
... 1.7% is a lot, for essentially nothing, IMO. The Mawer Global Balanced Fund, is, I believe, 1.15 and is as good as any if you must have a mutual fund, and I think you can buy direct from them, avoiding middle man fees. You can probably get a suitable ETF for less. But perhaps you need or want the TD system for other reasons. It's hard to find sufficient GIC homes for that much money, at close-to-best-rates with adequate insurance without using CUs in MB and points West, possibly Ontario if you can find a good enough rate somewhere, which is difficult.  

Great point, Loonie. I think a lot of people are attracted to the "prestige" of having their money professionally managed, on a discretionary basis or on a managed basis via pooled or mutual funds, by the investment management firms of the "Big 5" Banks + HSBC Canada. For less than the annual MER of either Simplii's or Tangerine's index mutual funds, I could go with an independent professional portfolio manager like John Hood, whom I have great respect and admiration for and is my single favourite BNN guest for his truthfulness and "tell it like he sees it" approach." He charges a 1% annual fee, slightly less for larger portfolios, plus the average annual MER of the underlying funds, which are almost exclusively ETFs and maybe some of the lowest cost Series F advisor class of mutual funds we don't have access to (which also is a "bone of contention" with me! Come on securities regulators, it's time to mandate the discount brokerages offer Series F funds of any fund they offer in Series A or slightly lower cost Series D!). Alternatively, you could go with a robo-advisor for half the cost (or less) of Tangerine's or Simplii's index mutual funds but on a fully discretionary basis, meaning they're held to a fiduciary "best interest" standard, not the simple "suitability" standard. In layman's terms, though I suspect you know this personally, Loonie, that means the advisor is actually an adviser (someone licensed to dispense advice and can't simply recommend an equally suitable fund with higher fees.sf-cool

Cheers,
Doug

February 23, 2018
11:34 am
gamgam
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Yes Saver-Mom, if incomes are drastically dissimilar I feel they would red flag a joint T5 slip claimed by the lower income earner. Just don't want to go there.

February 23, 2018
11:37 am
Doug
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Loonie said
I don't see why it would be impossible for CRA to know where the money came from. Can't they access bank records?  

Yes, under a "request for information," but the process adds costs. They would not do this unless you were under audit or extended assessment review, not just a so-called pre-assessment (preliminary) review. It involves contacting the bank...the bank has to trace the records and the process takes a couple months, at best, and often longer. It's not "automatic," as people think. I handled many RFIs and RTPs from CRA, not the initial intake, but in the tracing of records (for the RFIs) and in diplomatically explaining to clients why their funds were blocked (in a RTP).

A "good to know" tip on RTPs: the CRA can't garnishee CPP, OAS, Spouses Allowance or GIS income (or other forms of provincial social income assistance). Not sure about private pension income or RRIF income, the latter of which they probably can. Also, if you have a line of credit attached to your chequing account but have "available credit," the bank can't remit those funds unless they see a subsequent credit into the account, whether automatic or by the client, after the effective date of the RTP.

We had an elderly client whose husband had recently passed away with a small line of credit that was fully maxed out. While the debt was a liability for the deceased, because his pension income had been going to their joint account, HSBC's special credit department (which handled delinquent and impaired loans and facilities) couldn't automatically take whatever they wanted to repay it. They eventually worked out a payment arrangement she could afford (probably $25-$50 or less per month, can't remember), with no negative impact to her creditworthiness (her husband's, on the other hand, would've likely been shot but given that he was no longer living, does that really matter?) because she herself had no liability for it, and they were really lucky she agreed to that. I don't think he had any other savings elsewhere in so they could've been "stung" on that one. Privately and secretly to myself, I'd been hoping HSBC would've had to take a full write off on that one. Call it the "Robin Hood" in me. 🙂

Cheers,
Doug

February 23, 2018
11:42 am
Doug
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Saver-Mom said
Especially if the spousal incomes are dissimilar and one spouse deposits into the joint account while the other declares the interest...is this not tax evasion?  

What "dollar value" are we talking? One spouse earning $70,000 per year and another spouse earning $10,000, the "lost value of the potential tax liability" would not be worth the expense of them going to that extent so you're most likely OK to do so. For similar reasons to why if you only have a few thousand (or even $10,000) in non-registered interest income every year, even though, technically, it might be required, you don't practically need to report interest income under $50 where no T-slip was issued as no records are sent to CRA and it would be exceedingly difficult (not impossible, no, Loonie, I misspoke) for them to recoup that estimated $5-15 tax payable. 🙂

In gangnam's case, if he and his spouse have a several million dollar non-registered portfolio, yes, I would report everything correctly.

Like in everything, context is critical.

Cheers,
Doug

February 23, 2018
12:33 pm
gamgam
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Doug, I'm gamgam and she!

February 23, 2018
4:21 pm
Doug
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gamgam said
Doug, I'm gamgam and she!  

Oh, my apologies on both counts. Sorry, I just keep thinking of "gangnam style" from some song lyrics when I think of your screen name. 😉

Cheers,
Doug

February 23, 2018
5:05 pm
Loonie
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What's an RTP?

February 23, 2018
6:38 pm
Doug
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Loonie said
What's an RTP?  

Oh, sorry, thought I referred to it in full before abbreviating, no? My mistake if so.

Requirement To Pay (abbreviated as RTP on the "notes" portion of customer profiles by HSBC Canada).

It's the legal/technical term that CRA serves banks with after they have, presumably, gone through a number of options to collect income taxes payable from the taxpayer. It's generally handled centrally by the back offices (this is one thing HSBC Canada actually handles at its Vancouver and Markham Domestic Service Centres). CRA probably faxes, perhaps e-mails or mails, the requests to the bank, naming the clients and, presumably, including client SINs. Central teams of all the banks scan/search through electronic customer records and, when a match is found, apply account block of some sort. This can be handled in different ways, such as a total CR/DR account block, requiring EFTs to be manually posted by the DSC, or can be "refer DR special instruction," which effectively means CRs can still go in. Still, this was not done as you would want to have a "prompt" requiring a supervisor/manager override if the client was to deposit a large cheque and have it go out to CRA immediately. 🙂

Another common abbreviation is "FMEP," for a "family maintenance enforcement program order" on the account. These were also handled centrally.

Court orders for garnishees were much less frequent, presumably because: (a) they're expensive and (b) easily challenged by the client.

Cheers,
Doug

April 16, 2020
5:10 pm
Bud
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should have posted sooner hsbc offering 2.25% per annum till April 30

May 13, 2020
9:18 pm
Bud
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Canadian Dollar Special GIC Offer till June 1
180-Day or 1 Year Non-redeemable GIC at 2.00%
2 Year Non-redeemable GIC at 2.15%

US Dollar Special Term Deposit Offer:180-Day or 1 Year Term Redeemable Term Deposit at 1.25%

May 27, 2020
6:01 pm
Bud
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Hsbc has a deal open up a new Premier account get 800 bucks plus a 300 referral fee to the referrer. I think its 25k that has be deposited and a further 75k within 6mths money has to stay on deposit for a year apparently. Their current gic deal to june1 qualifies. I believe no monthly bank account fees for seniors.

Theyll do two cdic subs hsbc Bank and hsbc Mortgage, hsbc trust not available.

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