Under The Income Tax Act (“ITA”), if a taxpayer disposes of property that is all or substantially all of the assets used in an active business for consideration that includes shares of a corporation, the shares are deemed to be capital property. The disposal is considered to be a capital…
Category: Business Succession Planning
Total 56 Posts
All business owners face the task of trying to determine what to do with their businesses when they retire or in the event of a sudden death: sell to the next generation, sell to a 3rd party or sell the assets and wind-up the business. According to the Canadian Federation…
For most businesses they evaluate their success by quarters or perhaps terms described as “short”, “medium” and “long”. For a family business, they measure success by ensuring the company is preserved for the next generation and beyond. And despite the statistics which suggest that successfully transitioning a family business to…
A common estate planning technique is to structure a family trust which owns the shares of a small business corporation in such a way that allows each beneficiary (most commonly being members of the taxpayer’s immediate family – spouse and/or children) to participate in the sale or disposition of the…
In my last blog I spoke about one of the biggest risks to the successful transition of a family business – poor communication among family members. Related to this is family dynamics. It is often thought that one of the best ways to address this risk, is to involve the…
A fellow blogger wrote very eloquently late last week about succession planning for family owned businesses. Regrettably, as she noted the statistics for the successful transfer of family businesses are not very good. With the introduction of the new tax proposals, the challenge for a successful transfer of business to…
In this blog I’d like to remind readers that the idea of “keeping it in the family” is still the most common response business owners provide when asked what they would like to see happen to their business after they have passed away. In fact, many business owners initially think…
October 2, 2017 saw the end of the 75 day consultation period offered by the Department of Finance. The public response to the proposed rule changes was significant with the general public, industry bodies and professional advisors all weighing in on the measures. So, what now? At a conference organized by…
From time to time, I am asked to prepare, review or comment on structures for estate planning purposes with a mind to valuation issues. A common valuation issue is control and whether or not the value of the business interest(s) in the estate plan should be discounted for lack of…
In what might be one of the last pipeline transactions my office will advise on (depending on the outcome of the Government of Canada tax proposals), I ran into an unfortunate situation which served to highlight a fundamental aspect of estate planning: Planning for your beneficiaries. Recently, I reached out…