A large part of business succession planning is about tax. A business owner selling his business (whether by outright sale or by estate freeze) wants to make sure that he or she has set up a plan that minimizes the tax that will have to be paid.
For sellers of small businesses, a useful thing to keep in mind is the capital gains exemption that is available. A Canadian business owner can over a lifetime shelter up to $750,000 realized from the sale of the business. I believe this particular exemption is best explained by an accountant, so I'm linking to a site by Janet Nixon, CGA, which has a good discussion of the exemption. Click here to read it.
Capital Gains Tax (CGT) is chargeable upon individuals in respect of gains made from sell, transfer and otherwise disposal of assets.
ReplyDeleteCapital Gains Tax can be very punitive if not planned for. Careful planning for Capital Gains Tax can result in significant saving of the tax