Top 10 Tax Planning Strategies For Business Owners

Top 10 Tax Planning Strategies For Business Owners
  1. Structure business ownership to multiply access to the capital gain exemption (for 2017 $835,714). Get organized at least two years in advance of sale and include various family members (spouse, children, grandchildren, parents, siblings, etc)
  2. Structure a transaction to defer half of the tax applicable to the sale of a business. Plan does not require advance structuring.
  3. Customize wills to minimize Ontario probate fees.
  4. Review current remuneration strategy in light of recent increase in personal tax rates and changes to corporate taxation of investment income.
  5. Make prescribed rate loans to split income with a spouse, minor children or grandchildren.
  6. Include a trust as a private company shareholder such that dividends may flow to adult children and spouses.
  7. Plan for the succession of assets to the next generation to avoid conflict and ensure desired tax results.
  8. Use a trust to limit one’s terminal tax liability, while still providing flexibility to undo the freeze if necessary.
  9. Employ a holding company as a deferral vehicle to invest after-tax profits earned by an operating company.
  10. Segregate real estate assets from business assets to achieve greater flexibility in exit and estate planning.

Jim McConnery, CA, TEP,
Tax Partner

Zoran Vranjkovic, CPA, CA, CFP,

Bruce Raganold
Director of Business Development