What Happens to My Corporation?
For business owners, a holding company or operating corporation often holds a large share of family wealth — investments, retained earnings, and the value of the business itself. Passing that wealth to the next generation is far more complex than passing a personal investment account. Without structure, corporate assets can trigger a second layer of tax, lose the advantage of the capital dividend account, or pass in a way that doesn't match the owner's intentions.
Watch: What happens to my corporation?
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Taivi Tayler on corporate-owned wealth — passing a corporation or HoldCo to the next generation.
Taivi Tayler on corporate-owned wealth — passing a corporation or HoldCo to the next generation.
The corporate tax layer
Money inside a corporation is taxed within the company, and then taxed again when it's distributed to a shareholder as a dividend. When an owner dies, the company's shares are deemed disposed at fair market value — which can create a large personal capital gain and, depending on the structure, an additional tax on the company's investment holdings. An estate freeze, a family trust, or a life-insurance-funded buyout are common tools that prevent the value from compounding untamed into a single taxable event.
Using the corporation for retirement income
A corporation isn't only a legacy problem — it's also a retirement-income opportunity. With the right structure, retained earnings can be paid out as tax-efficient dividends over time rather than in a single high-tax year. Planning the order and timing of distributions is what turns a corporate savings account into a reliable, efficient retirement income stream.
Where plans go wrong, and what to do
A large capital gain on corporate shares at death
Consider an estate freeze to lock in today's value and pass future growth to the next generation.
Passive investment income taxed inside the company
Structure investment holdings to manage the passive-income tax rules and preserve the small-business deduction.
No plan to use retained earnings as retirement income
Build a dividend-drawdown plan that pays you tax-efficiently across retirement years.
The capital dividend account going unused
Track and distribute the CDA tax-free to maximize what reaches your family rather than the CRA.
This is exactly what the check-up covers.
In about 3 minutes you'll see where this issue sits in your own plan — then book a free review with Taivi to talk it through.
Or call Taivi directly: 1-866-550-6932