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Andrew Galbraith
Darren Knott

Tel: 905-685-6277

80 King Street West
Suite 600
St. Catharines, ON
L2R 7G1

Business Owners' Issues

The $750,000 Capital Gains Deduction

The capital gains deduction provides Canadian small business owners a compelling opportunity to shelter up to $750,000 of capital gains on the sale of shares of a qualifying small business corporation.

Because of the complexity of the relevant tax rules, professional tax advice is required. We work with you and your accountant to determine the benefits.

What is a holding company?

The purpose of a personal holding company is to control or retain shares of an operating company for business and/or tax planning purposes.

An important planning tool involves the receipt of an inter-corporate dividend by a holding company from an operating company. In many instances, these inter-corporate dividends may be received tax-free.

There are advantages and disadvantages in using a personal holding company which requires guidance from your qualified tax advisor.

Have you considered and estate freeze?

An "estate freeze” allows you to fix the value of all or part of your capital gains accrued on the shares of your business. The future growth is transferred to the eventual owners, typically your children. Sufficient life insurance could then be obtained to cover your future tax liability.

Because of the complexity of the relevant tax rules and the need to avoid any unforeseen tax pitfalls in implementing an estate freeze, professional tax advice as well as legal and estate planning advice in the design and implementation of an estate freeze will be required.

Is a private pension right for me?

The purpose of an Individual Pension Plan (IPP) is to provide a retirement pension for individulas such as small business owners, senior executives, or other professionals (e.g. doctors, lawyers, dentists, accountants)

Assets within an IPP can be protected from creditors. In most cases, significant lump-sum contributions can be made when first establishing an IPP. It allows small business owners to defer taxes and confidently plan for retirement.

These are only a few of the options every Canadian business owner should know about.