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While the annual tax filing deadline is months away, December is often the best time of year for Canadians to evaluate their overall tax strategies. Released today, a report by tax and estate planning expert Jamie Golombek outlines CIBC’s top ten tax tips.

“It’s important to review your overall tax-planning strategy with a professional now and ensure you’re making the most of any opportunities available to you, especially as a result of new savings and investment vehicles, credits and policy changes that came into effect for the first time in 2009,” advises Golombek, managing director of tax and estate planning for CIBC.

CIBC’s top tax tips are:

1) Tax-loss selling: In order to realize losses on public securities, trades must generally be made on or before December 24th or the trade will not settle until 2010 and the loss won’t be available until next year.

2) Advice for homeowners and prospective homeowners: 2009 brought significant tax changes for homeowners, prospective buyers and even those who renovated their home, cottage or condo. Canadians should be aware of changes made to the federal Home Buyers’ Plan (HBP) and consider their eligibility for the new non-refundable First-Time Home Buyer’s Tax Credit (HBTC). Canadians considering any home renovations only have until the end of January 2010 to complete their renovation work to qualify for the temporary Home Renovation Tax Credit (HRTC).

3) RRSP annuitants who turn 71 in 2009: Canadians who turned 71 earlier this year have until December 31 to make their final RRSP contribution before converting the plan into a RRIF or an annuity. Individuals in this situation need to discuss their RRSP conversion options with a financial advisor before it’s too late.

4) Contribute to an RESP: Registered Education Savings Plans (RESPs) remain the single best way to save for a child’s post-secondary education, as recent enhancements resulted in both more time and additional room to contribute. RESPs also offer investors the opportunity to supplement their savings with a number of government grants.

5) Make a donation: December 31 is the last day to make a donation and receive a tax credit for 2009. By gifting publicly traded securities with accrued capital gains to a registered charity or foundation, donors receive a tax receipt for the fair market value of the security being donated and capital gains taxes are eliminated.

6) Contribute to an RDSP: Canadians eligible for the Disability Tax Credit, their parents and other eligible contributors have until December 31 to contribute to a Registered Disability Savings Plan (RDSP) and apply for the matching Canada Disability Savings Grant (CDSG) and income-tested Canada Disability Savings Bond (CDSB) for the 2009 RDSP contribution year.

7) Purchase business assets : Self-employed or small business owners should consider accelerating the purchase of new equipment or office furniture planned for 2010 to take advantage of a full year’s depreciation. A time-limited special 100% write-off is available for new computer equipment.

8) Consider a prescribed rate loan at 1%: With the Canada Revenue Agency’s prescribed interest rate set at an all-time low of 1% until at least December 31, there is no better time for couples to consider the potential benefits of income-splitting — shifting income from the higher income spouse to the lower income spouse to reduce taxes. Any investment returns above 1% can then be taxed in the hands of the lower-income spouse.

9) Pay any investment expenses by year-end: Interest paid on money borrowed for investment purposes, as well as investment counseling fees for non-RRSP accounts can be deducted on your 2009 tax return, but the amounts must be actually paid by December 31.

10) Apply now to pay less tax all year: Apply now to reduce tax deductions at source for 2010 by completing the CRA Form T1213 before December 31. Once approved, this will allow your employer to reduce the amount of tax withheld at source by taking into account deductions such as RRSP contributions or child care expenses.

To view the full report and other CIBC tax reports, please visit www.cibc.com. For more tax tips, read Ahead of the pack: Tax tips on Advisor.ca.

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CC&L appoint new VP

Connor, Clark & Lunn Private Capital has announced the appointment of James Capling as vice-president in the firm’s Toronto office.

Capling brings over 12 years of financial services experience, having worked at Fidelity Investments, Manulife Financial and Invesco Trimark.

In his new role he will serve the needs of affluent investors in the areas of investment management and high net worth strategies.

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Dividend stocks a go-to play: CIBC

With low interest rates and uncertain growth ruling the day, a report from CIBC World Markets suggests that investors should turn their attention to dividend paying stocks.

The report says that the low interest rate environment has created “an exodus of investor dollars” from short-term risk free investments to dividend paying equities, and that reliable, less volatile dividend payers have tended to outperform the broad market.

A third factor is the reduced risk of falling into the “dividend trap” — investing in companies that offer a generous yield today but may not be able to pay such high dividends or indeed any dividends in the future.

“It’s back to Finance 101 for investors in equity markets these days,” says CIBC’s chief economist Avery Shenfeld in the bank’s latest Economic Insights report. “During equity booms, the value of dividends can be forgotten amidst a chase for capital gains. But in today’s low rate environment, divvying up the dividends can be particularly rewarding.”

Shenfeld notes that the number of firms paring or eliminating dividends has fallen sharply from early 2009’s peak, “a likely sign of improved boardroom expectations — or at least easing anxieties.” It also reflects the fact that corporate Canada has emerged from the recession with a lighter debt load than it had at similar points in prior cycles. “That leaves companies under considerably less pressure to cut dividends further for debt repayment purposes.”

Some TSX-listed firms have actually increased dividends in the last year, Shenfeld notes. “The list not surprisingly includes firms in highly capital intensive sectors like telecoms/utilities, which benefit from lower rates and provide vital or nearly indispensable services.” It also includes some consumer staples providers and companies involved in resource transportation and shipping, levered to Asian growth.

The complete report is available on the CIBC World Markets website.

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Central 1 Credit Union maintains record earnings

Buoyed by investments in government and high-grade corporate bonds made earlier in the year, Central 1 Credit Union (Central 1) recorded a net income of $88.7 million in the first nine months of 2009, compared with $11.5 million in the same period last year.

Central 1 posted a net mark-to-market increase of $19 million in the third quarter along with a gain of $6.9 million through sales of securities.

“Well-timed, conservative investments in the bond markets continue to generate record results for Central 1,” said Don Rolfe, president and chief executive officer.

Other highlights for the first nine months include:

• a return on equity of 24.2%, compared with 4.7% a year earlier • assets increased by 35.5% year-over-year, reaching $10.3 billion at September 30, compared with $7.6 billion a year earlier, reflecting significant growth in the liquidity of Central 1’s member credit unions.

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Pike joins First Trust Portfolios Canada

First Trust Portfolios Canada’s has named Jeffrey Pike as its new senior vice-president, advisor distribution.

A 23-year veteran specializing in generating innovative solutions for investment advisors, Pike previously worked for SEI Canada for over 11 years building and leading the advisor distribution platform.

“Jeffrey is a great addition to the First Trust team and we are thrilled to have him aboard,” said Fraser Howell, president of First Defined Portfolio Management Co.

“I am pleased to join such a unique firm,” said Pike. “I see it as a tremendous building opportunity. First Trust has developed a number of solutions and advisor relationships over 10 years — but the firm still has extraordinary potential to provide advisors from coast to coast with new mutual funds and other solutions that feel relevant for 2010 and beyond.”

(11/26/09)