If your T5008 relates to Mutual Funds, you cannot deduct the fees because they’re part of the management expense ratio (MER) and are not paid directly by the investor. Rather, these fees are deducted from the income reported on the annual tax slip.
If you are charged quarterly or annual management fees that you pay directly, you can deduct these expenses as an investment expense. Your investment advisor or planner should issue you a receipt for any tax deductible amounts, and it's advised that you consult them in regards to your fees.
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True financial advice, which is considered counsel on whether or not to buy or sell (or continue to hold) a specific investment or security, is considered a carrying charge – a cost incurred for investment advice or for recording investment income – under the Federal Income Tax Act, so any fees related to that charge are deductible.
Commissions
, though, which are transactional costs, are not deductible as a carrying charge, says Ms. Munro. Fortunately, these expenses are not entirely lost to the investor, because they increase the adjusted cost base (ACB) of securities, which lowers the capital gain that is realized when the security is sold.
Unfortunately, it can be difficult for a client to deduct fees from a fee-only planner who also offers investment
advice,
because it’s not easy to determine exactly how much to claim. While the financial advice is deductible,
commissions
for transactions and financial-planning services are not.
