Corporate reorganization - Estate Freeze
Covering capital gains tax liabilities on accrued increases in the value of our business shares is one thing. Deferring, in whole or in part, the tax liability is another. A common succession planning technique for dealing with capital gains taxes is called the “estate freeze”.
An estate freeze is both a tax-deferral method and a way of passing the business to your children. However, there are always other considerations involved with the transfer of a family business from one generation to another. For example, perhaps only one of your children wishes to remain active in the business. In that case, providing fair share inheritances to your other children may become a sensitive issue, particularly when you make the transfer of ownership prior to your death.
An estate freeze can be quite complicated. You should seek the help of financial and legal advisors. For more information contact our advisors.