The CDA, aka capital dividend account, is not an account (as I understand the word) in many ways. When I think of the word account, I think of a chequing, savings, or investment account—a place where our hard-earned money resides. However, no actual monies are housed within a CDA; it's what is known as a notional account. I'd consider it more accurately described as a tracker or running tally that the government has on a portion of all the profit and losses you've experienced by selling certain investments inside your corporation.
Without getting into the nitty gritty, the top three things you should know about the capital dividend account:
You could have thousands of dollars sitting inside your corporation that you could pull out tax-free.
Your accountant is not obligated to tell you about this account, and you do not automatically get this tax-free money handed to you.
If your financial advisor is not aware of the many ways the CDA can help you plan your investments, then they aren't optimizing your wealth generation.
Are you eager to learn more? Join me for a live webinar on Monday, April 28th, or Tuesday, April 29th, at 7 p.m. for a thirty-minute presentation. I will unpack these points and teach you how to make the CDA work for you.