In order to prevent carryovers or if they exist, to eliminate them, is to increase foreign income but not foreign taxes paid. There are about 18 countries that do not withhold taxes on dividends. A few examples are the UK, Hong Kong, Singapore and Bermuda. In most cases, the stocks are in the form of American Depository Receipts. (ADR’s) or look for mutual funds/ETF’s that are specific to those countries which do not withhold taxes.
If possible, reduce your Canadian income so that the foreign tax paid is minimal.
A large foreign income will result in an increase in the foreign tax credit limit. The current year foreign tax paid will be minimal and the remaining amount will draw down from the carryovers.
