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The demands and expectations of the global and domestic market are constantly bringing challenges. Taxes represent a significant expense for each business. Effective tax planning, tailored to your needs, will minimize your taxes and maintain your competitive advantage.

The Life Cycle Scan

Our approach to tax planning at Fernandez Young extends beyond interpreting tax legislations. We provide a Life Cycle Scan of your business as a road map towards meeting your goals and objectives. At each stage of your business life cycle, we sit down with you to map out a comprehensive tax efficient strategy designed to meet your immediate, mid-term and future objectives.

Our Services include: 

  • Wealth enhancement strategies
  • Tax minimization for owner managers 
  • Corporate tax consulting 
  • International tax services 
  • Transfer pricing strategies 
  • Non-residents tax compliance 
  • Business succession planning 
  • Estate tax planning 
  • Mergers and acquisitions 
  • Business reorganizations 

Wealth Enhancement Strategies

Tax legislation are constantly changing. A sound financial plan for individuals and business owners will enhance their personal and family wealth and preserve the value of their estates. 

It’s an old adage that death and taxes are two constant in life, but some taxes are better than other. For example, the top tax rates for individuals residing in British Columbia in 2012: 

  • 43.70% for interest and regular income
  • 21.85% for capital gains
  • 23.91% for eligible dividends
  • 33.71% for non-eligible dividends. 

Our tax advisers will work with you to develop strategies to increase after tax wealth. For instance, some points to consider:

Contribute to a Tax –Free Savings Account
Canadian residents aged 18 or older can contribute up to $5,500 per year to a tax-free savings account (TFSA). Properly utilized, TFSAs can be used to split income with a spouse, reduce taxable income, and reduce the clawback of income-tested benefits.

Contributions and withdrawals must be carefully planned. A tax applies to all contributions exceeding your TFSA contribution room.

Plan to Generate Profits as Capital Gains
Whenever possible, classify profits as capital gains and losses as business losses. You will pay 50% less when you realize a profit and conversely deduct 50% more when you incur a loss.

Owner-managers of active businesses, that are Canadian controlled private corporations, can take advantage of the enhanced capital gains exemption. Each individual shareholder is entitled to claim up to $750,000 of tax free capital gains on sale of his/her shares.

Claim Business Losses for all Commercial Activities
Whereas profits should be treated as capital gains when the opportunity arises, losses should be treated as business losses whenever commercial activities exist. This means that you are allowed to deduct 100% of the losses, rather than 50% of capital losses.

Tax Minimization
While business owners concentrate on growing their businesses, it is not surprising that many may not focus attention on tax issues that will impact their financial future.

A Holistic Approach
We believe the best tax minimization plan requires frequent communication with our clients. Constant communication provides the opportunity for us to develop a comprehensive understanding of our client’s objectives and requirements. We take a holistic approach, integrating steps to effectively manage your personal tax and corporate tax strategy.

Remuneration Plan
An owner-manager’s remuneration strategy must be reviewed as circumstances change from year to year. In most instances, it is not just about paying the owner enough salary in order for the company to pay the least amount of corporate tax. The appropriate remuneration package would consider a combination of the following:

  • Salaries
  • Dividends
  • Bonuses
  • Shareholders Loans
  • Tax Free Capital Dividends
There are also factors to consider when implementing a remuneration strategy, such as:

  • Maximizing Canada Pension Plan premium contributions
  • Maximizing RRSP contribution limit
  • Paying family members a reasonable salary
  • Retaining income in the company for re-investment
  • Taking advantage of available business or investment losses
  • Paying a tax-free dividend to your holding company
  • Using a holding company to protect corporate assets