A PHSP is a Canada Revenue Agency (CRA) approved plan that allows the medical expenses of employees to become a deductible business expense for the employer. This nationwide plan provides affordable medical coverage for the self-employed, and small business owner. Large corporations benefit from a low cost plan, while employees are provided with an exhaustive list of eligible expenses. While incorporated businesses have no applicable limits, unincorporated business must adhere to the maximum limits set out in the Income Tax Act, Section 118.2(1).

Highlights
Low Cost Non-Taxable Benefit
The PHSP is a low cost plan with no deductible, no monthly premiums, and no renewal charges. It allows the company to provide employees with a non-taxable medical benefit while allowing the company to fully tax deductible expense.

Deductible Business Expense
A PHSP is an effective way for a business to convert all health, medical and dental expense into a fully tax deductible business expense. This can result in a very significant savings for both the small business owner and the large corporation.

Combine with Other Health Plans
A PHSP can stand on its own, or can be used as an add-on to an existing plan. Employers determine coverage limits for each class of employee, and can individualize the plan as needs change. Expenses not covered by traditional insurance plans, can become eligible expenses using the PHSP.

Extensive Coverage
The PHSP is your medical coverage; therefore it is your choice. Allowable expenses are listed in the Income Tax Act, Section 118.2(2) and include braces, Chinese medicine, crowns, insulin treatments, massage therapy, orthopedic shoes and much more.

An EPSP is a mechanism available under the Income Tax Act that allows an employer to corporately deduct deposits made into a Company Trust that would normally be paid as income or bonuses to an employee. Both the employer and employee are exempt from CPP payroll deductions, as well as other related taxes, for example EI. Some of the highlights of EPSP include:

Highlights
Income Splitting
An EPSP allows income splitting between family members to save tax dollars by utilizing lower income taxation levels. "Kiddie tax" is not applicable.

Tax Circumvention
There is no payment taxes payable for both the employer and the employee.

Increase Cash Flow
Cash flow is increased both personally and within the corporation.

• Personally by combined income tax savings from income splitting and tax circumvention
• Corporately by tax circumvention

Bonus Surrogate
The EPSP can be utilized as an alternative to providing bonuses to employees.

Tax Deferral
Depending on the business fiscal year end, taxation can be deferred for up to 18 months.

Retirement Planning / Wealth Accumulation
The EPSP is a great way for accumulating wealth or saving for retirement without requiring more income, but rather by utilizing savings that are generated.

A Health and Welfare Trust is an arrangement, established under the Income Tax Act, between an employer and its employees where the employer agrees to provide one to more benefits for employees and/or their families. The corporation makes tax deductible contributions to the trust to reimburse the trust for payment of the premiums and expenses incurred in providing the benefits.

Highlights
Uses Pre-Tax Dollars
A HWT uses pre-tax dollars to pay for expenses that would normally be paid with after-tax dollars yet remains a non-taxable benefit to the members.

Acceptable Benefits
Accidental Death and Dismemberment, Wage Loss Replacement plan, Salary Top Up / Continuation, Long Term Care, and Provincial Health Service premiums can all be expensed through trust.

Increase Cash Flow
Higher premiums result in larger savings. Typical 50% savings on costs incurred to provide acceptable benefits.

Ability to Roll-in Existing Components
The HWT can be set up to hold existing insurance policies, and health services such as Private Health Services Plan (PHSP).

Flexibility
Eligible benefits are allocated b classes of employees.

Benefits Protection
Under current legislation Critical Illness benefits remain tax free to the beneficiary even though premiums are being paid by the trust.

An Individual Pension Plan or IPP is a defined benefit pension plan registered with the Canada Revenue Agency and the provincial regulator. It allows individual between the ages of 40 to 71 to substantially increase their retirement savings compared to a Registered Retirement Savings Plan or RRSP. Not only are the regular annual contributions greater than an RRSP, the expenses incurred in managing the assets are also tax deductible. This allows for further contributions to top-up the plan and maximize the assets available for tax-sheltered growth.

Highlights

• Larger regular contributions than RRSP (25-70% more)
• Potential to purchase optional Past Service back to 1991
• Additional contributions available for members who retire prior to age 65
• Plan expenses are deductible by the plan sponsor
• Assets are secured from creditors
• Multiple individuals may participate in a single plan
• Multiple corporations may participate in making contributions-obtaining the deductions
• Plan surplus belongs to the participants

Often businesses are unsuccessful after the primary owner of the company stops working or passes away. Currently one third of all Canadian companies do not have a set out plan for the succession of their businesses. This can be avoided with careful planning, which many businesses often times neglect.

With excellent planning, businesses will have the knowledge on:

• How to preserve ownership within their family
• How to maintain their current and future partnerships
• Know whether or not to sell to a third party
• Who will be the next head figure in charge to take place of the current one

All of these are very important to think about before the transfer of leadership or it could potentially destroy the business.

For example, the owner of a family business is planning on retiring but is the only one who is related to the business in his 4-person family. He does not know how to equally distribute the company’s power once he retires. He believes one of his sons is not worthy enough to take over the business while his other son is very hard working with lots of experience in that field. At our firm, we can help you create the best succession plan to suit your situation.

A.T. Financial has the trained professionals with the ability to help your distinct business build an individualized plan to carry on no matter what stage your business may be at. We have the strategies to help your business shelter taxes and provide earnings for those family members that may not be part of the company.

Our professionals have the capability to build our clients a benefits plan that will provide the appropriate benefits that fit nicely within your company requirements.

Examples of some of our benefits include:

• Life insurance
• Critical Illness Insurance
• Disability Insurance
• Dental benefits
• Extended health benefits
• Group RRSPs

One component of this plan includes a deductible, which is an amount of eligible expenses of health care a person must have before a reimbursement can be made to them. It comes in 2 forms: a calendar year deductible and a per prescription deductible.

Another component is co-insurance. This is the proportion of the eligible expenses greater than the deductible amount that can be reimbursed to you.

We know exactly how to design a plan that is right for you and your employees that are easy to claim and provide benefits with great value.

In order to guarantee your purposes are fulfilled, we have the trained professionals to build an appropriate arrangement to help you strategically diminish the impact of your taxes on your estate plan. An estate plan generally involves a will, power of attorney, the designations for insurance beneficiaries, and a trust deed in some circumstances. It is important to consider what your business means to you, how important your lifestyle is to your family, and how involved you are with the community.

The IRP is valuable when individuals need life insurance and want to expand their income for retirement. It uses the requirements of the Income Tax Act to work with life insurance contracts that are exempt. This growth usually exceeds values in a taxable investment and is not necessarily taxed every year.

This Income Tax Act permitted plan allows tax-deductible contributions that are either contributed to an RCA by the taxpayer or by the employer. The income received by the individual is treated like pension income and will be taxed accordingly. A lower tax rate will be used if the individual is no longer a Canadian tax player if they emigrate from Canada.

An RCA should be considered when the following occurs:

• The earnings are generally greater than the small business tax limit after paying the required amount to its owners
• Personal and corporate income taxes are declining where the company resides
• A company’s key individuals have little to no pension benefits
• The key individuals of a company intend to sell the business when they retired and want to emigrate from Canada

Insured Annuity strategy is perfect for those who have entered into retirement or are approaching retirement. If you are cautious with your capital and prefer fixed-income investments, we recommend this strategy for you. It consist of two separate, but complementary products, which are:

• a prescribed life annuity contract
• an exempt permanent life insurance contract

The insured annuity strategy is specifically made for clients who:

• have retirement assets invested in fixed income investments
• express interest in preserving capital for heirs
• want to maximize their after-tax on their retirement income

The insured annuity strategy offers:

• guarantee income for life
• preferential tax treatment of annuity income
• permanent life insurance protection
• the continuation of client control of their capital in a tax-advantaged life insurance policy
• flexibility to change policy beneficiary, and coverage amount (subject to any underwriting requirements)
• estate preservation from life insurance proceeds paid to beneficiaries at death (tax free)
• eliminate probate fees on death benefit with named beneficiary other than the estate (not applicable in Quebec)

This fund allows you to convert the tax-sheltered money you have put in your RRSP into retirement income. Only the amount of money you receive every year is taxed while the remains are still tax-sheltered.

The minimum income level that you get every year is based on the proportion of the RRIF assets you own. Other than the required minimum, the amount of income is variable.

This plan is continual once the individual reaches 80 years of age, unlike the LIF.

This is a tax-sheltered plan that allows you to convert the money that you’ve locked-into such as Registered Pension Plans (RPP), Locked-in Retirement Accounts (LIRA), or Locked-In RRSP, into your retirement income.

Revenue Canada requires that you withdraw a minimum specific amount of income from your LIF every year, which is taxable. The remaining still in the account stays tax-sheltered.

By the age of 80, you must have converted your LIF into a Life Annuity.

The LRIF is a tax-sheltered plan that allows you to convert the money that you’ve put in to a locked-in fund and turn it into retirement income. It has many similarities to the RRIF without the disadvantages of the LIF.

With an LRIF, it is much more flexible when you want to withdraw any funds because of its maximum payout formula that is unlike any other. As well, unlike a LIF, no conversion to a life annuity is required when the individual reaches a certain age.

Annuities:

i) Straight Life Annuity:
This is a contract that allows the individual or purchaser of the contract to receive a monthly income benefit throughout their lifetime. This is a right for you if you use the extra annuity income to buy life insurance policies as these payment amounts could possibly come to an end after a certain amount of time passes by. There are no payments required upon or after their death.

ii) Guaranteed Period Life Annuities:
This contract insures that income will continued to be paid to a specified beneficiary if the annuitant dies during the specific period that is guaranteed. The specific period is usually from 5 to 15 years.

Once the specified period has ended, payments to the beneficiary will cease. However, payments will continue being provided if the annuitant is still alive once the guaranteed period is over.

If your spouse lives longer than you and you have arranged a guaranteed single-life annuity, he or she will receive an unchanged monthly income until the guaranteed period is over.

On the other hand, with a joint-and-last-survivor annuity, your spouse will carry on receiving the same or a reduced payment amount. This allows you to leave money for your family if you and your spouse both die before getting the minimum amount of guaranteed payments.

Do you want an investment that can offer predictable and potentially increasing income for life?

With these plans, you will receive guaranteed lifetime income with possibilities of increasing future income payments.  These are excellent for clients who don`t have significant sources of guaranteed retirement income and allows them to pick a segregated fund portfolio for exposure to both fixed income and equity.  Clients will have the peace of mind that their income payments are secure no matter what happens to policy values.

The key advantages of this plan include:

• Guaranteed income for life
• Guaranteed income won`t decrease no matter how investments perform
• Potentially increasing guaranteed income to keep in check with inflation
• You can take an income as early as age 50
• The amount of lifetime income is based on the income percentage corresponding with the age of the client
• A 5% income bonus can be added if no withdrawals are taken for 15 years
• Potentitial creditor protection

These plans are available for the following companies:

• Canada Life
• Desjardins
• Empire Life
• Manulife
• Industrial Alliance
• Sunlife Financial

For more information on these plans, please contact us so that we can give you more details.