Are you missing tax deductions on your investment fees? Here’s what Canadians can claim — and how to reduce what you owe the CRA

Certain investment fees can reduce your taxable income — but only under specific conditions set by the Canada Revenue Agency (CRA). The rules depend largely on what type of account the investment is held in and what the fee is for.

Understanding these rules can help investors avoid leaving legitimate deductions on the table.

What are brokerage fees?

Brokerage fees are charges paid to a financial institution or investment platform to buy, sell or manage investments.

These fees vary widely depending on the type of brokerage you use — from full-service advisors to discount platforms and robo-advisors.

Common investment fees include:

• Trading commissions
• Investment management fees
• ETF or mutual fund expense ratios
• Account administration fees
• Financial planning fees
• Account transfer fees

While some of these fees may reduce your taxes, others cannot be deducted at all.

Types of brokerage fees investors pay

Understanding how each fee works helps determine whether it might be deductible.

Trade commissions

Trade commissions are fees charged when you buy or sell investments.

Historically these ranged from $5 to $10 per trade, but many Canadian brokerages now offer commission-free trading for certain securities.

Even when commissions apply, they are not tax-deductible. Instead, they are added to the adjusted cost base (ACB) of the investment.

This means they may reduce the capital gain when the investment is eventually sold, but they cannot be claimed as an annual deduction.

Expense ratios (MERs)

Mutual funds and ETFs charge a management expense ratio (MER), which covers operating costs and fund management.

These fees are embedded in the investment itself and are deducted automatically from fund returns.

Because investors never pay these fees directly, they cannot be claimed as a tax deduction.

Management fees

Management fees are charged when a professional manages your portfolio.

This is common with:

• Investment advisors
• Portfolio managers
• Discretionary accounts
• Robo-advisors

When these fees are paid for non-registered investments, they are generally tax-deductible.

Sales loads

Sales loads are commissions paid when purchasing certain mutual funds. These charges compensate the advisor or broker who sold the investment. Like trading commissions, sales loads are not tax-deductible.

Transfer fees

If you move your investment account to another brokerage, the original institution may charge a transfer-out fee.

These fees typically range from $125 to $150 at most Canadian brokerages today, though some platforms reimburse them for new clients.

Transfer fees are not tax-deductible.

Investment fees you can claim on your tax return

Some investment costs can be claimed under “carrying charges and interest expenses” of your tax forms. Specifically, these deductions appear on Line 22100 of your Canadian tax return.

To qualify, the expense must be related to earning investment income in a non-registered account. Examples include:

Portfolio Management Fees: Fees paid to an advisor or portfolio manager to manage your taxable investments.

Investment Advice Fees: If you pay specifically for investment advice tied to taxable investments, those fees may qualify.

Interest on Money Borrowed to Invest: If you take out a loan to invest in assets that can reasonably produce income — such as dividends or interest — the interest on that loan may be deductible. This rule is often used by investors who implement leveraged investing strategies. However, if the investment is expected to generate only capital gains, the interest is generally not deductible.

Investment fees you can’t claim on your tax return

Many investors are surprised to learn that most common investment costs do not qualify for deductions.

For instance, you cannot claim fees for registered accounts. That means fees you pay related to RRSPs, TFSAs, RRIFs and pension plans can not be claimed as a tax-deductible expense. This is because the investment income inside these accounts is tax-sheltered.

The CRA’s rule is simple: If the income isn’t taxable, the costs to generate it aren’t deductible.

Other fees you cannot claim include:

Trading Commissions: Trading commissions cannot be deducted annually. Instead, they are incorporated into the adjusted cost base of the investment.

Investment Newsletters and Research: Subscriptions to financial publications, newsletters or research services are not tax-deductible.

Safety Deposit Box Fees: These used to qualify as investment expenses but were eliminated as a deduction in 2013.

How to claim investment fees on your taxes

If you have eligible investment expenses, you can claim them on: Line 22100 – Carrying charges and interest expenses.

Eligible claims may include: