Strategy #1:

The savings window is closing fast but there still are tax saving opportunities.

Lend money to, “poorer” spouse, children 18+ and parents at prescribed rate which is 1%, provided the loan is made between now and March 31, 2018. On April 1, 2018, the rate is expected to rise to 2%. Therefore, capture this tax savings strategy before April 1, 2018. Your spouse, children 18+ and parents invest the money, report the investment income and get a tax deduction for the interest paid to you/dentist. If, say, they make 5%, they deduct 1% and report the 4% as income on their tax return, which will be taxed, in their hands, at their lower tax rate.  This low prescribed rate of 1% will continue to apply as long as the loan is outstanding, even if the interest rate rises.  The loan does not have to be repaid within a specific period of time. Rather, it could be repayable upon demand. The annual loan interest must be paid within 30 days after the calendar year.

Strategy #2:

Put all child tax benefits received from the government in a separate account for your child. Add any gifts given to your child by grandparents, etc.  Invest this money and the investment income will be taxed at the child’s lower tax rate.

Strategy #3:

All salaries and dividends earned by poorer spouse, children 18+ and parents should be deposited into their own bank accounts. Invest this money and investment income will be taxed at their lower tax rate.  Richer spouse/dentist should use his/her money to pay for all personal expenses, etc., including, vacation, clothing, private school fees, daycare, RRSPs for both spouses and children.

It is important that each spouse keep separate bank accounts to track and support the source and use of funds.



This article was prepared by David Chong Yen*, CPA, CA, CFP, Basil Nicastri*, BComm, CPA, CA, Choy Men Lin*, BMath, MAcc, CPA, CA, Eugene Chu, CPA, CA, and Louise Wong*, CPA, CA, TEP, of DCY Professional Corporation Chartered Accountants who are tax specialists* and have been advising dentists for decades. Additional information can be obtained by phone (416) 510-8888, fax (416) 510-2699, or e-mail,,, or Visit our website at  This article is intended to present tax saving and planning ideas, and is not intended to replace professional advice.