UNIQUE AND COMPLIANT TAX STRATEGIES
Tax problems created by passive income
Tax planning for passive income reduction is often overlooked, but it should be a top priority for corporations. Without careful planning, a corporation may inadvertently be subject to the highest marginal tax rate in Canada on passive income, which is above 50%. However, with the right strategy in place, these issues can be easily avoided.
Optimize the sale of your business or real estate
Selling your business is one of the hardest decisions you may make over your lifetime. Ensuring you have the best possible plan is imperative, but having a plan is not enough. One of, if not the most important component of this decision is how to create the most tax efficient sale possible, be it from a business or real-estate.
How to access corporate funds tax efficiently
Salary and dividends are the most commonly known ways for business owners to extract profits from their corporations. However, there is another, more efficient compliant strategy that many may not be aware of. Let us show you the way!
By collaborating with our expert team and a network of professionals, we will work closely with you, your legal and financial advisors, to create a customized plan that can help your business capitalize on opportunities for cash flow management, tax optimization, and retirement savings, among other strategies that you may not have heard of or seen previously.
Succession Planning and Estate Conservation
Most people are not aware of the consequences of dying. It’s been our experience that no one has ever left this planet alive, however it has been our experience, that the tax collector is waiting patiently to collect all the money from you that they never could get before your death. These taxes, if you haven’t handled them correctly, can ruin in how you thought you would treat your wife and children financially when you are gone. Without planning the security and peace of mind, that you planned, to soften the blow of your unexpected departure may not happen.
An owner of a company, Henry, with $2 million of income, approached us with substantial tax burden issues. Having drawn more than $250,000 over a ten-year period, he faced the highest level of taxation in Ontario at 53.53% at the time of writing.
We customized a proactive solution to reduce his tax burden and help him build his wealth more effectively, both near and long-term.
First, we recommended a tax-advantaged plan for his company, which he promptly adopted, leading to immediate benefits. In compliance with regulations, his company was authorized to make a tax-deductible deposit of $250,000 as a compensation for his years of service. Additionally, the plan permitted larger contributions compared to RRSP (Registered Retirement Savings Plan), making it even more valuable. Moreover, as his children were shareholders in the company, the remaining funds in the plan could be easily passed down to the next generation with minimal tax implications.
Second, we employed The Wealth Creator™ strategy, born from our PanFinancial Experience, to provide a tax-deferral solution for our clients. This strategic approach not only offered immediate tax benefits but also significantly optimized potential for long-term growth, resulting in an increase in retirement income beyond initial expectations.
With our input, Henry converted his tax burden issues into wealth accumulation opportunities compliantly:
- He lowered his current tax burden, saving himself a substantial amount of money.
- He created a long-term tax deferment plan.
Quite simply, we helped our Client turn a negative situation into a number of very big financial positives, helping him multiply his financial goals. Let us show you the way.