Capital Dividend Account (CDA) Explained | How to Pay Yourself Tax-Free From Your Corporation

If you are a Canadian business owner or incorporated professional, the Capital Dividend Account (CDA) can be one of the most powerful ways to extract corporate value tax free, without triggering personal tax.

In this video, Laurent Munier from Safe Pacific Financial breaks down what the CDA is, how it works, what creates CDA room, and the step by step process your accountant needs to follow to keep everything CRA compliant.

You will also see a practical example showing how an incorporated professional can use capital gains and corporate owned life insurance to create significant tax free distributions for their family and estate.

Timestamps – Jump to What Matters Most:

00:00 – The promise: extract corporate profits tax free
00:17 – Meet Laurent and what Safe Pacific helps with
00:39 – What the Capital Dividend Account is and why it matters
01:29 – What creates CDA room: the main sources
03:01 – Why CDA planning is so valuable for incorporated Canadians
04:00 – Reason 1: capital gains create tax free CDA credits
04:55 – Reason 2: corporate owned life insurance can create CDA
06:02 – Reason 3: access corporate profits without personal tax
07:04 – Reason 4: estate, family, and succession planning uses
08:53 – How to use the CDA properly: step by step process
10:12 – Schedule 89: verifying your CDA balance with CRA
10:40 – Electing dividends and avoiding costly overpayments
11:43 – Non resident shareholders and withholding tax considerations
12:10 – Documentation and audit readiness
12:57 – Case study: Dr. Wong, incorporated dentist in Toronto
13:30 – $1M capital gain example and the CDA breakdown
14:25 – Using corporate owned insurance to create future CDA credits
16:17 – Key rules and mistakes to avoid
17:08 – Overpaying the CDA and penalties
18:57 – Filing the right CRA forms on time
20:39 – Anti avoidance rules and GAAR considerations
22:21 – Final takeaway: keep more wealth in your family
23:49 – Book a discovery call with Safe Pacific
24:07 – Like, subscribe, and help these videos reach more business owners

Want help implementing CDA and corporate estate planning the right way?
Book a no pressure discovery call at https://safepacific.com/discovery-schedule
We specialize in working with incorporated Canadians to grow and transfer wealth tax efficiently.

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