Tax Saving Idea for Couples: the Superficial Loss Shuffle

"Superficial loss shuffle" is such an appealing name and the concept itself has the amusingly ironic quality of turning the CRA's superficial loss rules, which normally disallow tax advantages to an investor, on their head and give an advantage instead to the couple with investments in separate taxable accounts, one of which has capital gains and the other losses.

The idea is that the spouse with the losses be able to transfer them to the spouse with the gain and eliminate any tax owing. The idea and the description of how it works is here on the CCH website in Tax Planning in a Downturn in the February 2009 issue of the Financial Planning eMonthly newsletter under the pen of lawyer and accountant David Louis.

Note that the CRA prescribed rate of 3% mentioned in the article is now down to the can-never-go-lower rate (since it must be a positive whole number) of 1%.