What is a non-registered investment account?

A non-registered investment account is a taxable account with no contribution limits or special tax shelters. Unlike registered accounts like RRSPs or TFSAs, investment income earned in non-registered accounts is taxable in the year it's received. However, these accounts offer complete flexibility with no restrictions on contributions or withdrawals, and different types of investment income (interest, dividends, capital gains) are taxed at different rates, creating opportunities for tax-efficient investing strategies.

How are different types of investment income taxed in non-registered accounts?

Different types of investment income are taxed differently in non-registered accounts: 1) Interest income is fully taxable at your marginal tax rate. 2) Canadian dividends qualify for the dividend tax credit, reducing the effective tax rate - particularly beneficial for eligible dividends from Canadian public corporations. 3) Capital gains are taxed favorably, with only 50% of the gain included in your taxable income. 4) Foreign dividends are fully taxable at your marginal rate but may qualify for foreign tax credits to avoid double taxation. This differential taxation creates opportunities for placing investments strategically across your registered and non-registered accounts.

When should I use a non-registered account instead of an RRSP or TFSA?

You should consider using a non-registered account when: 1) You've maximized contributions to your TFSA and RRSP. 2) You need quick access to your funds without withdrawal restrictions. 3) You want to take advantage of the preferential tax treatment of capital gains and Canadian dividends. 4) You're investing in tax-efficient assets like Canadian dividend-paying stocks. 5) You want to use investment losses to offset capital gains for tax purposes (not possible in registered accounts). 6) You're investing for children or planning to income-split with family members. 7) You're a high-income earner who has exhausted tax-advantaged options. Ideally, non-registered accounts should be part of a broader investment strategy that optimally allocates different investment types across registered and non-registered accounts.

What tax records do I need to keep for non-registered investments?

For non-registered investments, you need to maintain detailed records of: 1) All purchase transactions, including date, number of shares/units, and price per share/unit. 2) All reinvested distributions, as these adjust your cost base. 3) Return of capital distributions, which reduce your adjusted cost base. 4) All selling transactions with dates, proceeds, and number of shares/units sold. 5) Commissions paid for buying and selling (buying commissions increase your ACB, while selling commissions reduce your proceeds). 6) Corporate reorganizations, stock splits, and mergers that affect your holdings. 7) Superficial loss transactions where you repurchase a security within 30 days before or after selling it at a loss. Keep these records for at least 7 years after filing the tax return for the year you dispose of the investment, as the Canada Revenue Agency may request them during an audit.

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Non-Registered Investment Account

Flexible Investing with Tax-Efficient Strategies

Capital Gains Inclusion

50%

Dividend Tax Credit

Available

Beyond Registered Accounts

A Non-Registered Investment Account offers unlimited investment potential with flexible contribution and withdrawal options. While not tax-sheltered like registered accounts, it provides unique tax advantages and complete control over your investment strategy.

Key Benefits of Non-Registered Investing

No Contribution Limits

Invest any amount without annual or lifetime contribution restrictions.

Tax-Efficient Options

Take advantage of capital gains and dividend tax credits for better after-tax returns.

Complete Flexibility

Access your money anytime without withdrawal restrictions or penalties.

Strategic Tax Planning

Use tax-loss harvesting and other strategies to optimize your tax situation.

Maximizing Your Non-Registered Account

Tax-Efficient Asset Location

Place tax-efficient investments in your non-registered account to minimize tax impact.

Strategic Tax-Loss Harvesting

Offset capital gains by strategically realizing losses when appropriate.

Dividend Investment Strategy

Take advantage of preferential tax treatment on eligible Canadian dividends.

Flexible Rebalancing

Adjust your portfolio without contribution or withdrawal restrictions.

Estate Planning Benefits

Transfer assets to beneficiaries with potential tax advantages through capital gains.

Optimize Your Non-Registered Account

Optimize your Non-registered deposits and withdrawals today

Empowering Canadians to take control of their financial future.

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