Specialized Tax Advice

 

Taxes are complicated. The Tax Act is continuously changing and growing in complexity and knowing all its intricacies is a cumbersome tax. To assist our clients in the matter of personalized taxes we rely on the expertise of our in-house CPA to guide investment planning decisions for our clients.

 

To assist our clients in the matter of personalized taxes we rely on the expertise of our in-house CPA to guide investment planning decisions for our clients.

Areas where our partners can assist our clients in are:

• Wealth Planning Strategies

• Family Cottage Considerations

• Canadian-Controlled Private Corporations (“CPPC”) Rules

• Personal Holding Company’s (“PHC”)

• Tax Splitting/Income Splitting Strategies

• International Property & Investments

 

Personal Taxation

If the individual does not own a corporation the tax considerations are often less complex. However, many estate considerations can easily become troublesome when it comes to cross-boarder assets or tax burdens from large capital gains. This is when understanding the Tax Act becomes valuable.

A key area where a CPA’s advice is beneficial for individuals and families is in the Wealth Planning process. Certain strategies like setting up a Family Trust may require further exploration due to complexities in the beneficiaries of your estate.

For our high-net-worth clients who hold substantial non-registered investments, considerations about disbursements through Wills and other legal documents often require detailed examination of the current and expected Tax Act. This is a situation where a tax expert can be invaluable and help clients avoid costly mistakes.

 

 

Business Owners

You have built up a successful business and nurtured it to be a fruitful entity that others benefit from. Now its time to step away and plan for the transition into the next stage of your life.

There are many strategies available to business owners to transition out of or sell their business outright. With proper planning and tax consultation, the tax burden on this transaction can be mitigated, leaving both the business and business owner better off.

If you own a CCPC or PHC, and you are transitioning from the accumulation-stage to the preservation-stage, there are specific tactics and rules that need to be followed to ensure that the cash won’t be double-taxed in the hands of the entrepreneur.

Take a Personal Holding Company (PHC) for example. Common ways that a PHC can pay dividends to the owner while minimizing the tax on disbursements are:

• Repayment of Shareholder Loan
• Paid-Up Capital Reduction
• Capital Dividend Account
• Taxable Dividends using the Refundable Dividend Tax on Hand notional tax accounts.
• Whole Life Insurance Strategies

The knowledge of the different techniques available is only part of the puzzle, as each approach requires given parameters that must be met to ensure no further taxes are charged. This is when we would sit down with our tax experts to build the complete picture of your circumstances, both now and in the future, to plan the optimal way to distribute your capital.  

Professionals

By taking advantage of specific tax codes and retaining a portion of your professional earnings within a corporation, you could defer paying personal income tax until a later date when the funds are withdrawn.

A major concern with professionals, whether it be physicians, architects, lawyers, or engineers comes from the high tax burdens attributable to their income level. Benefits of implementing some of the strategies available in the Tax Act include:

• Deferring personal taxes via a CCPC

• Income Splitting

• Maxing out RRSP & IPP contribution room

• Paying non-deductible business expenses from the corporation

• Tax effective borrowing from the corporation

• Utilizing the Capital Gains Exemption (“CGE”) from the CCPC at retirement

• Asset protection from creditors under the professional corporation

Operating your practice through a professional corporation can offer many benefits but introduces additional complexities and tax implications.  Considering the important changes to the tax legislation affecting private companies having inside access to a tax professional provides valuable advice when needed.