Combining a family trust with a small business corporation can provide tax planning opportunities. It is important to set the trust up properly to avoid potential income tax penalties and ensure it functions in a way to best suit your circumstances.
- Where there is an existing business corporation, a valuation and estate freeze will be necessary
- It is important to determine the proper settlor, trustees and beneficiaries
- Once established, after tax corporate income can be paid to the trust as a dividend then redistributed to one of more of the beneficiaries by the trust.
- This is effective in providing income to low bracket family members such as students during their university years or non working spouses.
- Use of a holding company to provide creditor protection
- Ability to use multiple capital gains exemptions for family members
- Use of Holding company as an alternative to RSP’s
- Ability to control assets that benefit your family members
*Insurance based investment solutions are provided through Affinity Financial Group. All other investment solutions are through Affinity Securities / Worldsource Securities Inc.