Tax Planning and Corporate Structuring

Tax Planning

You work hard for your money – we work hard for you to keep it.

Tax planning is structuring your affairs in such a way so as to reduce your tax obligations to the CRA. There are many ways to reduce your taxes, such as incorporating a business, making contributions to a registered charity of your choice, or contributing to your RRSP or TFSA accounts. These ‘vanilla’ tax planning measures may not be enough. At Kalfa Law Firm, we take you beyond vanilla and into advanced tax planning measures that can significantly reduce your overall tax burden to the CRA.

Meaningful Tax Planning

Meaningful tax planning engages the use of income splitting, salary deferral, and loans and corporate structures that may involve several holding companies, operating companies, and family trusts. Kalfa Law Firm will establish a corporate tax plan so that you can take advantage of the Lifetime Capital Gains Exemption (CGE) on the disposition of Qualified Small Business Shares, allowing you to shelter up to $835,714.00 (in 2018) in capital gains tax on the sale of qualifying shares over the course of your lifetime. We can determine whether a family trust may be right for you, multiplying the CGE across all of your children. We can issue shares to your spouse or other family members, neutralizing the highest marginal tax burden. We can incorporate a holding company and draw up intercorporate dividends, which will allow you to invest your funds in a corporation and earn far more on your investment than you would personally.

Income Splitting Still Available in 2018

Recently, the federal government proposed changes to a corporation using income splitting through dividend sprinkling in Canada. Despite what you may have heard, these measures have not eradicated all possibilities for income splitting. The present law allows a corporation to income split with an individual between the ages of 18 and 25, provided the individual contributes to the business. The law further allows income splitting for individuals over 25, if the corporation sells goods and the individual owns at least 10% of its issued capital. Income splitting is permitted for individuals over the age of 65.

With years of experience in corporate and tax law, we have the knowledge and experience to assist you in preparing a corporate tax plan. We are Your Business Lawyers. Call us today.