For years, Canadian business owners could face a worse tax result selling a business to their child than selling the same business to a stranger. Canada’s Intergenerational Business Transfer (IBT) rules were designed to address that problem, but they aren't a simple tax election, and they don't let you sell to family while acting as though nothing has changed.

In this episode of Legacy: The Business Succession Podcast, host Jared Pilon of Legacy Accounting LLP explains Canada’s rules for intergenerational business transfers. Learn how a family business succession may qualify for capital-gains treatment, what the immediate and gradual transfer routes involve, and why a tax-efficient deal still fails if your family, financing, and cash flow are not ready.

What You’ll Learn in This Episode:

• Why selling your business to family can create a different tax result than selling to an arm’s-length buyer
• How IBT rules may help eligible family business transfers avoid the usual Section 84.1 deemed-dividend result
• The difference between an immediate and gradual intergenerational business transfer
• Why legal control must move to the next generation even under a gradual transition
• How vendor take-back financing works when the next generation cannot pay the full purchase price upfront
• Why the business must generate enough cash to fund operations, bank debt, purchase payments, and the parents’ retirement needs

An intergenerational business transfer ensures the next generation is ready to lead, the business can support the purchase, parents can fund retirement, and the family is prepared to transfer control.

Download Legacy’s free Business Succession Planning eBook at legacyllp.ca to start identifying the ownership, financing, tax, and family conversations that should happen long before a transition is on the table.

https://www.legacyllp.ca/resources/ebooks/business-succession-planning-canada

Find us at:

https://www.legacyllp.ca/

reception@legacyllp.ca

Timestamps

00:00 Kicking it off

01:36 IBT Rules

04:05 Two transfer paths

08:05 IBT sales & other structures

15:22 Compliance issues

18:33 Wrapping it up

#BusinessSuccession #FamilyBusiness Structure #IBT

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Disclaimer: By using this website, blog or podcast, users agree as follows: The information, services and/or products are for general information only, and any reliance on the information provided therein is done at your own risk. If you make tax, accounting, investing or legal decisions after accessing this website, blog or podcast, it is recommended that you consult a qualified professional first. The views and opinions expressed are those of the author, seller, guests or publisher and do not necessarily reflect the views of the organizations or businesses that these individuals are associated with. Although we make strong efforts to make sure our information is accurate, we cannot always guarantee that the information on this podcast is always correct, complete or up-to-date.

You want to incorporate and prepare for a future sale. But moving valuable assets into a corporation the wrong way could trigger significant taxes.

In this episode of Legacy: The Business Succession Podcast, host Jared Pilon of Legacy Accounting LLP explains the Section 85 rollover. It is a tax-planning tool that allows business owners to transfer eligible assets into a corporation on a tax-deferred basis, without triggering taxes because they are changing their business structure.

What You’ll Learn in This Episode:

• What a Section 85 rollover is and how it can defer tax when moving assets into a corporation
• How incorporation can create more flexible options for family business succession, estate freezes, voting control, and share ownership
• Why a Section 85 rollover can support corporate purification
• How incorporating well before a sale may create future planning opportunities, including potential access to the Lifetime Capital Gains Exemption
• Why Section 85 elections require coordinated work between your accountant and lawyer

Download Legacy’s free Business Succession Planning eBook at legacyllp.ca to start identifying the ownership, tax, and transition questions that could affect your future plans.

https://www.legacyllp.ca/resources/ebooks/business-succession-planning-canada

Find us at:

https://www.legacyllp.ca/

reception@legacyllp.ca

Timestamps

00:00 Kicking it off

01:24 Section 85 reorganization

04:07 Sole proprietors

07:04 Corporate purification

10:26 Proper process & rules

12:23 Selling your business

15:45 Wrapping it up

#Section85Rollover #Corporate Structure #Incorporation

________________________________________
Disclaimer: By using this website, blog or podcast, users agree as follows: The information, services and/or products are for general information only, and any reliance on the information provided therein is done at your own risk. If you make tax, accounting, investing or legal decisions after accessing this website, blog or podcast, it is recommended that you consult a qualified professional first. The views and opinions expressed are those of the author, seller, guests or publisher and do not necessarily reflect the views of the organizations or businesses that these individuals are associated with. Although we make strong efforts to make sure our information is accurate, we cannot always guarantee that the information on this podcast is always correct, complete or up-to-date.

Your business may be worth millions today. While your child may be the clear successor, how are they supposed to buy at the value you have spent decades creating, without taking on a mountain of debt or forcing a rushed sale?

In this episode of Legacy: The Business Succession Podcast, host Jared Pilon of Legacy Accounting LLP explains estate freezes to help your business transition. Done properly, an estate freeze can create options for ownership transition, tax planning, control, and family continuity.

What You’ll Learn in This Episode:

• What an estate freeze is and how it works in a family business
• How to transfer future business growth without giving away the value you have already built
• How freezing your value may help manage future tax exposure, including a deemed disposition at death
• Future economic ownership and voting control do not need to transfer at the same time
• Why business valuation matters, and when a “refreeze” may be required

Download Legacy's Business Succession Planning eBook at legacyllp.ca to begin identifying the ownership, control, tax, and family conversations that should be part of your succession plan.

https://www.legacyllp.ca/resources/ebooks/business-succession-planning-canada

Find us at:

https://www.legacyllp.ca/

reception@legacyllp.ca

Timestamps

00:00 Kicking it off

01:52 Growth shares

04:00 Benefits of an estate freeze

10:02 Growth access doesn't mean control

14:27 Refreezing

16:37 Succession planning

18:36 Wrapping it up

#EstateFreeze #SuccessionPlanning #FamilyBusiness

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Disclaimer: By using this website, blog or podcast, users agree as follows: The information, services and/or products are for general information only, and any reliance on the information provided therein is done at your own risk. If you make tax, accounting, investing or legal decisions after accessing this website, blog or podcast, it is recommended that you consult a qualified professional first. The views and opinions expressed are those of the author, seller, guests or publisher and do not necessarily reflect the views of the organizations or businesses that these individuals are associated with. Although we make strong efforts to make sure our information is accurate, we cannot always guarantee that the information on this podcast is always correct, complete or up-to-date.