Long-term Tax Planning in a Time of Crisis

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Long-term Tax Planning in a Time of Crisis

The COVID-19 pandemic has caused significant disruption for many businesses, but as is often the case, with crisis comes opportunity. For business owners, the economic downturn has created opportunities to dramatically lower short- and long-term tax liabilities.

Below is a link to a webcast that highlights three strategies for accomplishing this:

Estate refreeze

With a refreeze transaction, you can turn the negative impact that the economic downturn is having on your business’ value into a significantly lower tax bill on your estate upon death.

Income Splitting

Interest on prescribed-rate loans, sometimes referred to as family loans, is currently 2%. The rate – which CRA calculates based on 90-day treasury yields in the first month of the preceding quarter – is set to drop to 1% in July. This is a tremendous opportunity for significant tax savings, and with proper structuring, you can effectively lock this rate in permanently.

Corporate surplus extraction

If you have significant equity built up in your corporation and have a need for a large sum of personal cash, there is a six-step strategy you can implement to extract it at the capital gains tax rate.

Invested In You - Webcast Details:

Title: Long-term Tax Planning in a Time of Crisis
Presenter: Peter Routly, Partner, Southern Ontario Group Tax Service Line Leader, BDO Canada
Key topics: Estate refreezes, income splitting and corporate surplus extraction
Access: Click here – available for viewing at any time

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As always, please do not hesitate to reach out if you have any questions about your wealth plan or investments.

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