This three-hour course shall focus on common corporate reorganizations in the owner/manager context. In particular, the seminar will describe the significant income tax advantages of two classic corporate structures, the “Single Holdco” and the “Double Holdco”. The tax traps involved in the implementation of such structures will also be discussed.

TOPICS:

• Single Holdco (for Related Shareholders)
• Double Holdco (for Unrelated Shareholders)

Tax Advantages:

• Income Splitting
• Multiplication of Capital Gains Exemption through family trust
• Purification outlet for Capital Gains Exemption

Implementation Steps (“Breaking Up is Hard to Do”):

• Related Party Butterfly 55(3)(a)
• Unrelated Party Butterfly 55(3)(b)

Tax Traps:

• Purification Trap for CGE: watch out for inter-corporate debt!
• Subsection 55(2)
• Corporate Attribution under section 74.4
• HST Trap