Are you an unincorporated self-employed worker? Are you an unincorporated rental-property owner? Are you in a general partnership? Do you have significant personal debt or expenses or a large outstanding tax bill? National Bank can help you optimize your finances so that you benefit from substantial tax savings!

Then National Bank can help you optimally manage your finances and benefit from substantial tax savings!

Your financial partner has developed easy-to-use financing solutions 1 specifically suited to tax strategies like “cash damming.”2

Cash Damming

Cash damming is a tax strategy that lets you take advantage of interest-deductibility rules by gradually converting personal debt (the interest on personal debt is not deductible) into business debt (the interest on business debt is fully deductible).

How it Works

  • You use your business income to cover your current expenses and gradually
    repay your personal debts.
  • You borrow money to cover your business expenses.
  • You can deduct the interest on the borrowed money.
  • You save on taxes.

Without cash damming you have to pay your current expenses and personal debts from your net business income. The interest payable on your personal debts is, of course, not tax deductible.

Interested in Cash Damming?

In light of the growing number of tax rules governing interest deductibility, you must have your accountant or tax specialist validate the appropriateness and advantages of using this technique in your specific situation.

Your accountant or tax specialist can determine:

  • whether you qualify for cash damming
  • how much you could save with this technique
  • what business expenses qualify for financing
  • whether the financial structure proposed by National Bank for cash damming is optimal for you
  • how your tax strategy will be affected by changes to tax legislation.

Your National Bank advisor will propose:

  • a financial structure to make it easy to manage your cash damming strategy,
  • a financing solution that will allow you to reduce interest charges on the money you borrow, while enjoying optimal tax savings.

To know more about cash damming, don't hesitate to contact your advisor.

Are you looking for a financing solution1 tailored for tax strategies? Get information on National Bank All-In-One BankingTM3.


1 Subject to credit approval by National Bank.

2 This tax strategy is supported by the Singleton decision rendered by the Supreme Court of Canada in 2001 and by documents published by Canadian tax authorities since October 2002. The Canada Revenue Agency has clearly indicated that cash damming is consistent with the wording of paragraph 20(1)(c) of the Income Tax Act concerning interest deductibility, since the borrowed monies are used for specific and, presumably, “eligible uses.”

3 Subject to credit approval by National Bank. For financing exceeding 80% of the value of your home, on condition that a loan insurer (approved by National Bank) accepts to insure your loan. Some conditions apply.

TM National Bank All-In-One Banking is a trademark of National Bank.