The Challenge: Dr. A, a successful specialist in Toronto, was earning a substantial income but found that over 50% of her earnings were being lost to personal income taxes. She was struggling to build wealth efficiently outside of her RRSP and felt overwhelmed by the complexities of managing her growing practice's finances.
The Strategy: Through our comprehensive wealth management approach, we identified that Dr. A had not yet incorporated her medical practice. We collaborated with her accountant to establish a medical professional corporation (MPC). This allowed her to retain a significant portion of her earnings within the corporation at a much lower corporate tax rate. We then implemented a tax minimization strategy, utilizing corporate investments and an Individual Pension Plan (IPP) to accelerate her retirement savings.
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The Challenge: Mr. B, the founder of a successful manufacturing company, was approaching retirement age. He wanted to transition the business to his key management team while ensuring he had enough capital to fund his desired retirement lifestyle. However, he lacked a formal succession plan and was concerned about the potential tax implications of selling his shares.
The Strategy: We engaged in deep retirement planning and succession discussions with Mr. B. Recognizing the need for a structured exit, we facilitated a management buyout (MBO) strategy. To optimize the tax outcome, we utilized his Lifetime Capital Gains Exemption (LCGE) and structured the buyout over several years. Furthermore, we implemented a corporate surplus extraction strategy to efficiently move retained earnings from his holding company to his personal accounts.
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The Challenge: The C Family, owners of a multi-generational real estate enterprise, faced a significant impending tax liability upon the eventual passing of the founders. They wanted to pass the future growth of the enterprise to the next generation while maintaining control and ensuring equitable distribution among active and inactive family members.
The Strategy: Our team spearheaded a comprehensive estate planning initiative. We orchestrated an estate freeze, exchanging the founders' common shares for fixed-value preferred shares, thereby locking in their current tax liability. New common shares were issued to a family trust for the benefit of the children, allowing all future growth to accrue to the next generation. To fund the eventual tax liability on the preferred shares, we implemented a strategic insurance planning solution using corporate-owned life insurance.
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