Federal tax change helps keep business in the family
Bill C-208, approved June 29, levels the playing field when passing on a family business to the next generation
For Canadian family business owners, many factors go into deciding how to pass the business on to the next generation. When the time comes to retire or exit the business, tax can be a key factor in determining how best to structure the sale.
Previously, under Canada’s Income Tax Act, those who sold the shares of their business to a company owned by their children or grandchildren were taxed at a significantly higher tax rate than if they had sold their business to a purchaser at arm’s length. The result essentially amounted to a tax penalty for keeping the family business in the family.
Original Article Source Credits: Western Investor, https://www.westerninvestor.com/
Article Written By: Dino Infanti, KPMG LLP Canada
Original Article Posted on: Jun 30, 2021