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17.5 Tax Planning Strategies, Pension Plans & the RDSP
Canadian Securities Course CSC
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1 Introduction & Exam Overview
About the CSC Exams
2 Chapter 1: The Canadian Investment Marketplace
1.1 The Canadian Securities Industry & the Investment Dealer's Role 1.2 Financial Intermediaries: Banks, Trusts, Credit Unions, Insurers & Pension Funds 1.3 Financial Market Trends 1.4 Investment Capital, Financial Instruments & Financial Markets 1.5 Canadian Exchanges, ATSs, Dark Pools & the Order Protection Rule 1.6 Canadian Securities Regulators, the CSA & CIRO 1.7 Investor Protection: OSFI, CIPF and CDIC 1.8 Ethics, Standards of Conduct & the Client Focused Reforms 1.9 Conflicts of Interest, Complaint Handling & Remediation
3 Chapter 2: The Economy
2.1 Economics Foundations & Measuring Economic Growth 2.2 The Business Cycle & Economic Indicators 2.3 Inflation & Interest Rates 2.4 The Labour Market & Unemployment 2.5 The Bank of Canada & the Inflation-Control Target 2.6 Implementing Monetary Policy: The Operating Band, Market Operations & Transmission 2.7 Fiscal Policy, Deficits & the Challenges of Government Policy 2.8 International Finance & Trade: The Balance of Payments and the Canadian Dollar
4 Chapter 3: Features and Types of Fixed-Income Securities
3.1 The Fixed-Income Marketplace, Bond Terminology & Security 3.2 Protective Covenants, Retirement Provisions & Extendible/Retractable Features 3.3 Government of Canada Securities: T-Bills, Marketable Bonds & RRBs 3.4 Provincial & Municipal Debt and Strip Bonds 3.5 Corporate Bonds, Credit Spreads & Bond Ratings 3.6 Money Market Instruments, Floating-Rate Notes & International Bonds 3.7 Other Fixed-Income Securities & Reading Bond Quotes
5 Chapter 4: Pricing and Trading of Fixed-Income Securities
4.1 Bond Pricing, Price–Yield Relationships & Accrued Interest 4.2 Yield Calculations & Return Measures 4.3 The Term Structure of Interest Rates & Yield Curve Theories 4.4 Fundamental Bond Pricing Properties: Volatility Rules, Duration & Convexity 4.5 Bond Market Trading & Bond Indexes
6 Chapter 5: Common and Preferred Shares
5.1 Common Shares: Ownership Rights, Voting & Restricted Shares 5.2 Dividends, DRIPs, Stock Splits & Consolidations 5.3 Preferred Shares: Features, Cumulative Dividends & Taxation 5.4 Preferred Share Variations: Convertible, Callable, Retractable, Floating & Rate-Reset 5.5 Fundamental Equity Metrics & Ratios 5.6 Stock Indexes & Averages
7 Chapter 6: Equity Transactions
6.1 Order Types, Execution & Market Mechanics 6.2 Margin Trading: Long Accounts & Borrowing 6.3 Short Selling & Short-Margin Requirements 6.4 Trading & Settlement Procedures: T+1, CDS & Confirmations
8 Chapter 7: Derivatives
7.1 Derivatives: Role, Underlying Assets & Users 7.2 Options Fundamentals: Calls, Puts & Moneyness 7.3 Option Strategies & Risk Management 7.4 Forward & Futures Contracts 7.5 Rights & Warrants
9 Chapter 8: Corporations and their Financial Statements
8.1 Corporate Structures & Corporate Governance 8.2 The Annual Report, Accounting Standards & the Auditor's Report 8.3 The Balance Sheet & Income Statement 8.4 The Cash Flow Statement & Earnings Quality 8.5 Public Company Disclosure, Investor Rights, Take-Over Bids & Insider Trading
10 Chapter 9: Financing and Listing Securities
9.1 Government & Corporate Financing: Underwriting and Syndicates 9.2 The Prospectus Process, Stabilization & Purchaser Rights 9.3 The Exempt Market & Private Placements 9.4 The Listing Process: TSX, TSXV & Capital Pool Companies 9.5 Continuous Disclosure, Material Changes & Insider Reporting
11 Chapter 10: Investment Analysis
10.1 Methods of Equity Analysis & Macroeconomic Analysis 10.2 Fundamental Industry Analysis 10.3 Company Analysis: Competitive Advantages, Governance & the Dividend Discount Model 10.4 Discounted Cash Flow & Relative Valuation Multiples 10.5 Financial Statement Ratio Analysis 10.6 Assessing Preferred Share Investment Quality 10.7 Technical Analysis: Charts, Trends & Patterns 10.8 Technical Indicators, Volume, Breadth & Sentiment
12 Chapter 11: Portfolio Analysis
11.1 Measuring Investment Return 11.2 Measuring Risk: Types of Risk, Standard Deviation & Downside Measures 11.3 Portfolio Risk & Return: Correlation and Diversification 11.4 Beta, the Capital Asset Pricing Model & the Security Market Line 11.5 Portfolio Manager Styles: Equity & Fixed Income 11.6 The Portfolio Management Process: Objectives, Constraints & the IPS 11.7 Asset Mix, Monitoring, Performance Evaluation & Rebalancing
13 Chapter 12: Alternative Investments, Other Managed, and Structured Products
12.1 Alternative Investments: Structures, Fees & Liquid Alternatives 12.2 Alternative Strategies, Performance Measurement & Due Diligence 12.3 Segregated Funds, Labour-Sponsored Funds & Listed Private Equity 12.4 Income Trusts, REITs & Closed-End Funds 12.5 Structured Products: PPNs & Market-Linked GICs 12.6 Split Shares & Asset-Backed Securities
14 Chapter 13: Mutual Funds
13.1 Managed Products & Mutual Fund Structure 13.2 Pricing Mutual Fund Units: NAVPS & Forward Pricing 13.3 Mutual Fund Fees, Sales Charges & Unit Series 13.4 Mutual Fund Regulation, Fund Facts & Account Opening 13.5 Types of Mutual Funds & Fund Management Styles 13.6 Redemptions, Withdrawal Plans & Measuring Fund Performance
15 Chapter 14: Exchange-Traded Funds (ETFs)
14.1 ETF Origins, Structure, Tax Efficiency & ETF Facts 14.2 ETF Creation, Redemption & Arbitrage 14.3 Types of ETFs & Advanced Strategies 14.4 Comparing ETFs, Mutual Funds & Individual Securities
16 Chapter 15: Working with the Institutional Client
15.1 The Institutional Marketplace & Institutional Clients 15.2 Institutional Investment Guidelines, Styles & Restrictions 15.3 Buy Side & Sell Side: Trading Desks, Revenue, Clearing & Best Execution 15.4 Block Trading, Dark Pools & Algorithmic Trading
17 Chapter 16: Fee-Based Accounts and Working with the Retail Client
16.1 Fee-Based Accounts: Managed & Non-Managed Models 16.2 Fee Transparency, CRM2 & Total Cost Reporting, and MWRR vs. TWRR 16.3 The Financial Planning Approach & the Life Cycle 16.4 Behavioral Finance, Sequence-of-Returns Risk & Client Coaching 16.5 Estate Planning Basics
18 Chapter 17: Canadian Taxation
17.1 The Canadian Taxation System 17.2 Taxation of Investment Income 17.3 Capital Gains, Losses & The Superficial Loss Rule 17.4 Registered vs Non-Registered Tax-Advantaged Accounts 17.5 Tax Planning Strategies, Pension Plans & the RDSP
17.5 Tax Planning Strategies, Pension Plans & the RDSP
Key Takeaways Explain This Topic AI
Tax planning uses three main ideas: defer tax, split income with lower-taxed family members, and convert income into more lightly taxed forms.
Income earned on money given or lent to a spouse is attributed back to the giver; for minor children, interest and dividends are attributed but capital gains are not.
A prescribed-rate loan avoids attribution if interest is charged at the prescribed rate and paid by January 30 of the following year.
Up to 50% of eligible pension income can be split with a spouse, and donating listed securities in kind eliminates tax on the capital gain.
RDSPs attract Canada Disability Savings Grants of up to $3,500 a year ($70,000 lifetime) and Bonds of up to $1,000 a year ($20,000 lifetime).
Last updated: October 2026
Tax planning means arranging affairs to pay no more tax than the law requires. It is legal, unlike tax evasion (hiding income or making false claims). Good planning also respects anti-avoidance rules, which the CRA can use against arrangements that abuse the Act.
Three Basic Strategies
Strategy Idea Examples
Deferral Pay tax later, letting money compound in the meantime RRSPs, RPPs, holding growth assets instead of interest-paying assets
Income splitting Shift income to family members in lower brackets Spousal RRSPs, pension income splitting, prescribed-rate loans
- Conversion Earn income in a more lightly taxed form Capital gains and Canadian dividends instead of interest
- The Attribution Rules
Without limits, a high earner could simply give investments to a spouse or child in a low bracket. The attribution rules prevent this:
Spouse or common-law partner: if you give or lend money or property to your spouse, the income and capital gains it earns are generally attributed back to you and taxed in your hands.
Minor children (under 18): interest and dividends on property you give or lend are attributed back to you, but capital gains are not . Investing gifts for children in growth assets therefore shifts some tax to the child.
Common Exceptions
Prescribed-rate loans: lend money to a spouse at the CRA's prescribed interest rate in effect when the loan is made; the spouse must pay the interest by January 30 of each following year. Investment income above the interest is then taxed to the spouse.
Fair market value sales: sell property to a spouse at fair market value for fair consideration and elect out of the spousal rollover.
Second-generation income: income earned on income that was attributed is not itself attributed.
TFSAs: giving a spouse money to contribute to their own TFSA does not cause attribution while the funds stay in the TFSA.
Spousal RRSPs: withdrawals are taxed to the annuitant spouse once the three-year rule is met.
Canada Child Benefit: CCB payments deposited into an account for the child are not subject to attribution.
Other Planning Techniques
Pension income splitting: a taxpayer can allocate up to 50% of eligible pension income to a spouse or common-law partner on their returns. Lifetime pension payments from a registered pension plan qualify at any age; RRIF and annuity income generally qualify from age 65.
CPP sharing: spouses receiving CPP can share their retirement pensions.
Donating securities in kind: giving publicly listed securities directly to a registered charity eliminates tax on the capital gain and produces a donation receipt for the full fair market value.
Interest deductibility: interest on money borrowed to earn income from a business or property (for example, to buy dividend-paying shares in a non-registered account) is generally deductible. Interest on money borrowed for an RRSP or TFSA, or for personal use, is not.
Tax-loss selling: selling losing positions before year-end to offset realized gains, while watching the superficial loss rule and the settlement deadline (the trade must settle by December 31).
Asset location: holding interest-paying assets in registered plans and Canadian dividend payers and growth stocks in taxable accounts.
Registered Pension Plans (RPPs)
An RPP is an employer-sponsored pension plan registered with the CRA.
Defined benefit (DB) Defined contribution (DC)
Promise A pension based on a formula (for example, 2% × years of service × average earnings) A pension based on contributions plus investment returns
Who bears investment risk The employer The employee
Contributions Employee contributions are deductible; employer funds the shortfall Employer and employee contribute set amounts, both deductible within limits
Membership in an RPP or a deferred profit sharing plan creates a pension adjustment (PA) that reduces the member's RRSP room, so members of rich pension plans have less RRSP room than people without pensions.
Registered Disability Savings Plans (RDSPs)
An RDSP helps people who qualify for the disability tax credit save for the long term.
Contributions: not deductible; lifetime limit of $200,000 per beneficiary; no annual limit.
Canada Disability Savings Grant (CDSG): matching grants of 100% to 300% of contributions, depending on family income, up to $3,500 a year and $70,000 over the beneficiary's lifetime.
Canada Disability Savings Bond (CDSB): up to $1,000 a year for lower-income beneficiaries, with no contribution required, to a lifetime maximum of $20,000 .
Grants and bonds are paid until the end of the year the beneficiary turns 49.
Holdback rule: if the plan is terminated or withdrawals are made, grants and bonds received in the previous 10 years generally must be repaid.
Withdrawals: contributions come out tax-free; grants, bonds and investment growth are taxable to the beneficiary, usually at low rates.