Tax & Wealth Planning

Tax & wealth planning

Tax strategies for the whole picture.

How your wealth is invested, owned, and accessed can shape what it makes possible for you and your family.

Our work reaches beyond the investments we manage. We actively examine personal, corporate, trust, and estate arrangements for tax-planning opportunities, from how income is received and financing is structured to how wealth passes to the next generation. Every strategy is considered alongside liquidity, costs, risks, and family priorities.

Our team develops planning ideas with BMO’s tax and estate specialists and brings recommendations to your accountant and lawyer for coordinated assessment and implementation. The questions below illustrate this work; the appropriate approach depends on your circumstances and the applicable tax and legal requirements.

The technical examples below concern Canadian tax rules. Families with assets, residency, citizenship, or beneficiaries in other jurisdictions require an assessment of the relevant rules and potential cross-border exposure.

01

Where capital is held, and how it reaches you

Are investment decisions being considered across your personal and corporate wealth, including the cash you actually need?

Your portfolio needs to work within your wider financial structure. We consider where investments are held, how their income is treated, and when capital may be needed personally or within a corporation. The aim is to assess the after-tax cash available for your priorities alongside liquidity, costs, and investment risk.

We develop ideas for income and distribution planning, potential deductions, and the ownership of capital, then coordinate their assessment with your accountant and lawyer. Moving assets or drawing corporate funds needs to be considered in context, with attention to tax consequences and the role each pool of capital serves.

Further reading: BMO Private Wealth — Tax Planning

02

Understand the capital dividend account

Does your corporation have a verified capital dividend account balance that should form part of the cash-flow discussion?

For some private corporations, the capital dividend account is an important part of planning distributions to shareholders. It tracks specified tax amounts, rather than a separate pool of cash. A qualifying capital dividend may be received without income tax by a Canadian-resident shareholder when the applicable conditions are met.

Before a distribution, your accountant should confirm the available balance and required election. We can coordinate the investment and liquidity discussion around that advice so a distribution is considered within both your corporate needs and your personal plan.

Further reading: CRA Income Tax Folio S3-F2-C1 — Capital Dividends

03

Plan before a business sale

Have the structure and history of your company been reviewed before a transaction is underway?

A business sale can reshape both your balance sheet and your family's future. Starting early lets our team and BMO specialists develop planning ideas around ownership, succession, and the company’s assets, with your tax and legal advisors assessing the details. This can include examining whether a proposed share sale could qualify for the capital gains deduction, subject to specific conditions and the shareholder’s circumstances.

We help connect that work with the financial decisions that follow: the cash required at closing, future spending needs, reinvestment priorities, and capital intended for the next generation. The discussion begins before proceeds arrive.

Further reading: CRA — Capital Gains, Guide T4037

04

Choose how to give

If you intend to make a charitable gift, should you compare a direct gift of securities with a gift of cash?

For families who already intend to support a cause, the choice of asset can be part of the plan. A direct donation of eligible appreciated publicly traded securities to a qualified donee can receive different capital-gains treatment from selling the investment and donating the proceeds.

Before acting, coordinate the gift with the receiving organization and your tax advisor. The type of security, any benefit received in return, documentation, and your broader tax position can affect the result. We can help relate the investment decision to your giving objectives and remaining liquidity needs.

Further reading: CRA — Gifts of shares, stock options, and other capital property

05

Prepare the liquidity an estate may need

Could your estate meet its obligations without disrupting the assets you want your family to retain?

A valuable estate is not necessarily a liquid one. Business interests, investment property, and other assets can create a mismatch between what the family owns and the cash available to meet obligations. Canadian tax rules generally treat capital property as disposed of at death, subject to important exceptions and possible deferrals.

Together with your tax and legal advisors, we help connect estate intentions with a practical liquidity plan. That may include reviewing available cash, beneficiary arrangements, and whether insurance merits evaluation with a qualified insurance advisor. The right approach depends on ownership, costs, coverage, and the needs of your family.

Further reading: CRA — Taxable capital gains on property, investments, and belongings for someone who died