In many cases, yes. The Canada Revenue Agency (CRA) allows individuals to deduct fees paid to manage or take care of their investments, and fees for certain investment advice, on line 22100 of their tax return. The key exception is fees for services connected to certain registered plans, namely an RRSP, RRIF, TFSA, FHSA, pooled registered pension plan (PRPP) or specified pension plan (SPP). These cannot be deducted (CRA, line 22100).
Whether your own fees qualify depends on what the fee is for, the type of account it relates to and who you pay it to. We’ll walk through what the CRA says, how GST and HST apply, and why the way you pay for advice matters.
What investment fees can you deduct in Canada?
According to the CRA, you can generally deduct the following on line 22100 (Carrying charges, interest expenses and other expenses):
- Fees to manage or take care of your investments, other than fees for services connected to an RRSP, RRIF, TFSA, FHSA, PRPP or SPP
- Fees for certain investment advice, or for recording investment income
- Most interest paid on money borrowed to earn investment income, such as interest and dividends (the CRA notes this does not apply if the investment can only produce capital gains)
The CRA also lists items you cannot deduct, including brokerage fees or commissions paid when buying or selling securities, safety deposit box charges, and subscriptions to financial newspapers, magazines or newsletters (CRA, line 22100). Brokerage fees and commissions are instead used when calculating your capital gain or loss.
|
Type of cost |
Deductible on line 22100? |
|
Fees to manage or take care of investments, other than for the registered plans listed below |
Generally yes |
|
Fees for certain investment advice |
Generally yes |
|
Fees for services connected to an RRSP, RRIF, TFSA, FHSA, PRPP or SPP |
No |
|
Brokerage fees or commissions on buying or selling securities |
No (used to calculate capital gains or losses) |
|
Interest on money borrowed to contribute to registered plans such as an RRSP, TFSA, FHSA, RESP or RDSP |
No |
|
Safety deposit box charges |
No |
Source: CRA, line 22100
Which investment advice fees qualify?
The CRA’s line 22100 page points to Interpretation Bulletin IT-238R2, Fees Paid to Investment Counsel, for what counts as qualifying advice. That bulletin, which the CRA has archived, says the fees must be paid to a person whose principal business is advising others whether to buy or sell specific shares or securities, or whose principal business includes administering or managing shares or securities (CRA, IT-238R2).
The bulletin also says the deduction covers fees, other than commissions, paid for this kind of advice or for the administration or management of your shares or securities. In practice, this means the type of firm you pay, and what you pay it for, both matter.
Are financial planning fees tax deductible?
Generally, no. IT-238R2 states that fees paid for other types of advice, such as general financial counselling or planning, do not fall under the investment counsel fee deduction (CRA, IT-238R2).
If you pay one firm for both investment management and financial planning, it is worth understanding how those fees are separated on your statements. Your accountant can help you confirm what can be claimed.
How are investment management fees calculated?
The way investment management fees are calculated varies from firm to firm. Before you compare costs, it helps to understand whether you are paying a fee for advice and management, commissions on individual transactions, or costs built into the products you hold.
Fee-based vs. commission-based advice
How you pay for advice affects more than your tax return. With commission-based advice, the advisor is paid when products are bought or sold. With fee-based advice, you pay a fee for advice and management directly.
Discretionary investment management is offered through Access Family Office Corp. (AFO), a registered portfolio manager, on a fee-based model. Rather than being compensated through individual transactions or products, AFO delivers its advice through one transparent fee that includes all of its services. AFO does not earn commissions, accept referral fees or receive compensation tied to any specific product or strategy. Through AFO’s Discretionary Investment Management service, every investment decision is made within the context of your broader financial picture, including tax planning, retirement income and estate goals.
Transparency is the main reason AFO moved to a fee-based model. Clients can see what AFO is paid right on their statement. The model also aligns AFO’s goals with those of its clients. When assets grow, AFO is compensated more, and when they don’t, its compensation doesn’t grow either.
Whichever way you pay, knowing what each fee covers helps when you and your accountant review which fees may be deductible.
Confirm your situation with a tax advisor
Tax rules depend on your circumstances, the accounts you hold and how fees are charged. Access Private Wealth Corp. (APW) provides high-level tax guidance as part of our Integrated Tax & Financial Planning service and has a CPA on the team. For specific tax advice, filings or implementation, we coordinate with your accountant or other tax professionals.
If you would like to understand how your investment costs fit into your overall tax picture, connect with our team.
FAQs
Are investment management fees tax deductible in Canada?
In many cases, yes. The CRA allows individuals to deduct fees paid to manage or take care of their investments on line 22100. Fees for services connected to certain registered plans, such as an RRSP, RRIF, TFSA or FHSA, are not deductible.
Can I deduct fees paid on my RRSP or TFSA?
No. The CRA excludes fees for services connected to certain registered plans, including RRSPs, RRIFs, TFSAs and FHSAs, from the line 22100 deduction.
Are financial planning fees deductible?
Generally, no. The CRA’s interpretation bulletin on investment counsel fees states that fees for general financial counselling or planning do not qualify for the investment counsel fee deduction.
Are trading commissions tax deductible?
No. The CRA states that brokerage fees or commissions paid when buying or selling securities cannot be deducted on line 22100. They are used to calculate your capital gain or loss instead.
Is GST or HST charged on investment management fees?
A CRA GST/HST memorandum on the products and services of investment dealers lists advisory fees and portfolio management fees as taxable services. Your accountant can confirm how this applies to the fees you pay.
Where do I claim investment management fees on my tax return?
Eligible fees are claimed on line 22100 (Carrying charges, interest expenses and other expenses) of your personal income tax return.
This article provides general information only and does not constitute personal financial, investment, insurance, tax or legal advice. Financial circumstances differ and laws, tax rules and government programs may change. Speak with qualified professionals about your individual circumstances.